Dear readers; you are probably wondering why I, David Dahm am involved with this matter. The answer is simple. It has to do with my work in promoting the accounting profession (and issues in the medical profession as well – in particular how the medical and health care professions can reduce fatal medical errors.) After a meeting with Federal Senator Nick Xenophon who was interested in hearing more about my ideas, Senator Nick Xenophon also raised a concern about CPA Australia.
It has been clear to me for some time, (and I am not the only one), that the conduct of one the professional bodies of which I am member – CPA Australia – has severely embarrassed the accounting profession, despite its international status and high profile.
This is the reason why I (with my colleagues) nearly liquidated CPA Australia (see CPA lobby group keeps no confidence on the table.)
Taking on an international professional body with a $180m p.a. turnover is not something I would recommend to anybody, without a lot of careful consideration. But that’s we did. Now in the public’s and your interest I want to share with you the full story,. It is a problem that closer to home than you might realise. I believe it’s an inspiring story about doing something positive for the greater good.
What responsibilities does a profession have? Among them is unfailing duty of care to protect you.
As your professional accountancy and advisory group, it is our duty to protect your life savings and act in the community’s best interest. We consider this every time we sign your tax return or provide you with financial advice. We take this role very seriously, not just professionally but personally too.
So when a professional body that is supposed to be watching over us and enforcing high ethical standards begins to falter, and we ourselves do nothing, then something is seriously wrong. For a true professional, doing nothing is not an option. See Ian McPhee’s whitewash on CPA’s Alex Malley era is imminent.
What do you do…
- When the top end of management of your professional body starts using their members’ hard earned and trusted reputations to profit from financial products e.g. loans, shares etc and investment advice?
- When your professional body, which is supposed to independently scrutinise poor, unethical or unscrupulous advice members may give to their clients, actually profits from this bad advice instead?
In these cases, there is a significant problem.
Global Financial Crisis v.2 breeding a new financial scandal.
This is akin to your family doctor recommending and prescribing you with an inappropriate drug that he or she has a financial interest in. Your doctor profits all the way down the line. There are no checks and balances in place. The danger is, with the accounting profession, you are breeding the next Global Financial Crisis as rival competing professional bodies go down the same path, and consider lowering their standards to meet the competition. (See story on banning all commissions to accountants Accounting bodies resist financial planning reform.) It also explains why for some people, their accountant’s or advisers’ services can be so cheap, if a kickback to the adviser underwrites their adviser’s fees!
Sadly, these arrangements are being copied by other professional international bodies, as these bodies are now global franchises.
We saw a similar problem with the Big 4 Banks. These conflicted arrangements caused enormous family hardship in the Global Financial Crisis. These issues are the subject of a Royal Commission and compensation being demanded into conflicted advice provided by our 4 banks.
The accounting profession is the last bastion of safety
The accounting profession alone, (not even the medical profession) has internationally agreed standards or ethics, which are there to protect your hard earned savings.
Indeed, the accounting profession is the last bastion of protection from these types of predatory behaviour. We need to protect this privileged position we have earned over the decades, and not take it for granted.
Every profession and not-for-profit body can be blinded by glossy brochures and impressive powerpoint slides. Membership apathy leaves us vulnerable to unethical and self-interested Board members and management who seek to quickly profit from your goodwill at the expense of the greater good.
The CPAA Board and management knowingly and wilfully threw the members and the public’s trust in the profession into doubt. They are still doing their best to cover up the truth by silencing members and the community.
Stand up for doing the right thing… or it will come back to haunt you.
It is important to nip these issues in the bud before they become irreversible. We must fight the tendency to say we are too busy or we simply do not think that it affects us, or we cannot affect change.
Where to from here?
It’s not my intention to preach or proselytize. But in life, if you do not stand up for your purpose, your profession and the community, you stand for very little. Your life is empty.
The CPA’s experience is a lesson for all not-for-profit Board members. Do not take your members and the community’s trust for granted. Do not gamble away their integrity and hard-earned reputations. Stay in touch, carefully listen and act.
Right now, the last thing we need is another global financial crisis. That’s why I am proud to be Chair of this courageous group.
For more information read https://www.linkedin.com/pulse/killing-bambi-why-we-decided-provisionally-liquidate-high-camphin
Disclosure: The author David Dahm is a Fellow of CPA Australia and the Institute of Chartered Accountants.