The regulatory and co regulatory framework in Australia

The regulatory framework in Australia

There is no single body responsible for regulating the accounting profession in Australia. The bodies that are involved in the regulation of the various arms of the profession and other activities in which accountants may be engaged, are outlined below:

Regulatory body	Who they regulate
Australian Securities and Investments Commission (ASIC)	>Auditors and liquidators – through the Companies Auditors and Liquidators Disciplinary Board (CALDB) >Financial planners >Company directors
Tax Practitioners Board	>Tax practitioners
Australian Prudential Regulation Authority (APRA)	>Auditors/trustees of superannuation funds >Directors and senior managers of insurance companies
Insolvency Trustee Service Australia (ITSA)	>Trustees in bankruptcy

The co-regulatory framework

Ethics is fundamental to the accountability of the profession and its mandate to self-regulate within the broader co-regulatory regime in Australia.

How does it piece together?

The co-regulatory environment comprises the regulators, standard-setting bodies and the three professional accounting bodies; the Institute, CPA Australia and the Institute of Public Accountants. Independent, national standard-setting bodies set benchmarks for members in terms of their required levels of technical skill and operation, as well as their professional conduct. Leading with the Code of Ethics – APES 110 Code of Ethics for Professional Accountants – the overarching professional standards are set by the Accounting Professional & Ethical Standards Board (APESB).

In 2011, the APESB reissued APES 110 incorporating amendments to the international standard, Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants (IESBA). The purpose was to realign the standards after revisions to the IESBA code in 2009. The Code of Ethics is important because the heart of the Chartered Accounting designation is a responsibility to act in the public interest. This is akin to a social contract that pledges ethical practice, underpinned by the principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Institute President, Rachel Grimes, says this commitment to the public interest defines the profession and sets the Institute apart from other member bodies and industries. ‘Ethics is the foundation attribute of our very being and it’s critical to protect that. It takes a lifetime to build reputation, yet it can be destroyed in a moment – and often that’s a decision-point on an ethical basis.’

The Code of Ethics is one of the standards and regulations that contain the mandatory ethical and professional requirements of all members of the Institute. These professional standards also require members to conform to additional technical standards set by the Australian Accounting Standards Board and the Auditing and Assurance Standards Board. As with the technical standard-setting bodies, the Institute engages with the APESB and makes submissions on the development and review of standards, to ensure they align with best practice, relevant global standards and regulatory developments.

Article last updated 3 November 2011