Friday, February 23, 2024

Truth v Good Publicity: Former PwC partner Peter Collins escapes sanctions from CA ANZ

Former PwC partner Peter Collins escapes sanctions from CA ANZ 

The former PwC partner at the centre of the firm’s tax leaks scandal will escape sanctions from Chartered Accountants Australia & New Zealand because of delays to the introduction of new powers giving the professional body the ability to investigate former members.

Appearing before the Senate’s Finance and Public Administration Committee hearing on Friday, the CA ANZ revealed it was unable to investigate former head of international tax Peter Collins - the former partner who leaked confidential information from Treasury and the Australian Tax Office - because of rules preventing it from sanctioning former members.
Those rules were changed last year as part of a review into the professional body’s disciplinary process, but CA ANZ general counsel Vanessa Chapman told the Senate inquiry the changes - which would enable it to investigate former members - had not yet been implemented. And once they were, they would not be open to retrospective application.
“Mr Collins resigned his membership from Chartered Accountants Australia & New Zealand,” Ms Chapman responded to questions about why Mr Collins was absent from a list of CA ANZ members sanctioned in the 2022-23 financial year.
“The rules that were amended last year come into effect on Governor-General assent, so those former member rules are not yet effective - that is the law unfortunately and we share the frustration.
“That power will effectively mean that regardless of whether the member resigns or not, there will be a capacity to investigate, and potentially to determine that conduct that occurred whilst they were in membership is in breach of our by-laws or the code of ethics, and that will be potentially a public determination. 
“It has to at the time that particular by-law becomes effective, it has to attach to people who are in membership at the time - it’s a principle of law.”
Mr Collins copped an eight-year ban from providing financial services from the Australian Securities and Investments Commission in October.
CA ANZ has issued a stop order on individuals linked to the PwC scandal, preventing them from resigning their membership and avoiding further sanctions.
However the professional body says Mr Collins resigned before it was made aware of the Tax Practitioners Board’s findings that he had shared confidential government information with PwC personnel.
CA ANZ would not confirm the names of individuals it was currently investigating as part of its PwC probe, or whether former chief executives Tom Seymour and Luke Sayers were part of their investigation.
Mr Seymour, who took over the top job from Mr Sayers in 2020, stepped down as chief executive last May after confirming he was one of dozens of partners who received emails related to confidential Treasury information obtained by Mr Collins. 
Mr Seymour and Mr Sayers are both current members of the CA ANZ.
As part of the changes approved by CA ANZ last year, it will increase the maximum fine for breaches by member firms from $50,000 to $250,000, and will introduce measures to reinforce the self-reporting obligations of members and firms. 
At the time the changes were announced - in a bid to rebuild public trust in the sector - the professional body said measures to enable it to investigate the actions of former members would “close a loophole that allows members to avoid disciplinary action by terminating their membership”.
It was revealed on Friday that the CA ANZ had sanctioned just 17 members of the big four accounting firms for misconduct over the past seven years.
And while chief executive Ainslie van Onselen said she was “satisfied that where there is evidence of wrongdoing by our complaints team ... that actions are undertaken fairly and within due process”, Senator Barbara Pocock said the figure underlined the body’s weak approach to disciplining poor behaviour in the industry.
“It has taken a Senate committee to surface these issues,” she said. 
“It has taken an enormous amount of activity across our public sector to hold these things to account, and what we’re hearing is a regulatory regime which does not actively surface enough of poor behaviour, and has very weak instruments of redress when it is found.
“I am not comforted by the evidence you’ve given us that we have appropriate machinery in place.” 
Senator Deborah O’Neill was equally scathing in her summary of the culture that had evolved in the consulting industry.
“I’ve had more than 43 complaints as a senator, so I suggest that whatever structures and cultural practices are embedded in your industry, you are not getting a speak up culture,” she said. 
“We need to really talk turkey now. There’s a big problem in your sector. There’s a whole lot of questions that need to be ventilated around voluntary codes, mandatory codes. 
“And I note that perhaps this statement to include a positive duty to report is the beginning of your organisation catching up with what we’re getting as public points of access for people in your profession who are not coming to you.”