Member | Established: 1886 | Member since 1977
Founded in 1886, CPA Australia aims to provide members with education, training, technical support and advocacy as a part of its core services. CPA Australia also works with its members, and local and international bodies to represent the views and concerns of the profession to government, regulators, industries, academia and the general public. CPA Australia offers three levels of membership including Associate (ASA), CPA, and Fellow (FCPA).
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
In Australia, the Australian Securities and Investments Commission (ASIC)—the audit oversight regulator—and three professional accountancy organizations (PAOs) share responsibility for carrying out quality assurance (QA) reviews. The ASIC is authorized to review all audits of all entities while the PAOs implement review procedures for their respective members. CPA Australia operates a Quality Review Program (QRP) to ensure that its members in public practice maintain high professional standards. The association reports that the QRP fulfills the requirements of SMO 1.
CPA Australia notes that an increased focus has been placed on education and dissemination of learning outcomes from the QRP; for example, educating members on common breaches and the importance and value of quality control along with resources to help improve these procedures. CPA Australia also notes that its QA review results are linked to its investigate and disciplinary procedures, and where necessary, members may be subject to disciplinary action for failure to comply with professional standards. Outcomes from the reviews are shared more broadly to members in its e-newsletter and in its annual report alongside continuing professional development activities as well as to stakeholders such as the Financial Reporting Council and Professional Standards Council.
The association’s General Manager, Public Practice is charged with ensuring that quality reviewers are trained and competent to carry out reviews. This includes offering a mandatory annual training along with issuing technical and administrative updates.
In recent years, the association notes that it has brought the review of members’ audits for more low-risk services (i.e. not audit, assurance, review, insolvency, valuation or forensic services or members that are not undergoing their first review) in-house to be performed by a qualified CPA staff members. Follow-up reviews may also be carried out by a qualified CPA staff member, with significant audit experience. These changes allow contracted external reviewers to perform a greater number of higher risk reviews.
SMO 2: International Education Standards
Educational requirements for the two protected professional accountancy titles in Australia—registered company auditor (RCA) and qualified accountant—are governed by the Corporations Act 2001 and the Australian Securities and Investment Commission (ASIC) Act 2001. The ASIC and three professional accountancy organizations (PAOs) in the jurisdiction also have a role in setting and implementing initial and continuing professional development requirements (IPD and CPD, respectively). According to the Corporations Act 2001 and ASIC’s Regulatory Guide 154, one of the entry requirements for becoming an RCA or a qualified accountant, respectively, includes holding a recognized tertiary accounting qualification from one of the PAOs. CPA Australia’s Certified Public Accountant (CPA) designation is recognized as one of these.
In order to use the CPA designation, CPA Australia member must obtain an undergraduate degree accredited by CPA Australia, complete the CPA Program and three years’ practical experience, and then fulfill CPD requirements to renew and maintain their qualification.
The association notes that it provides options for graduates from disciplines other than accounting and finance, along with for candidates with gaps in their core competencies, to work towards CPA status through the completion of its foundation exams. Its CPA Program—the content of which the association reviews on a triennial basis—then comprises four compulsory subjects and two electives that together with the required practical experience ensures that its members develop practical and technical skills, knowledge, and values that meet the needs of the market. It has formal written assessments in place as well as computer-based testing that it launched in 2014. In light of the 2015 IES revisions, the association reports that it has reviewed and revised its programming and accreditation requirements. The following overarching learning outcomes are being incorporated into CPA Program learning experiences in recognition of the need for finance and accounting professionals to demonstrate contemporary workplace competencies:Be technically skilled and solution drivenBe strategic leaders and business partners in a global environmentBe aware of the social impacts of accountingBe adaptable to changeBe able to communicate and collaborate effectively.
CPA Australia members must complete 120 hours of CPD activities over a three period which aligns with the 2010 IES requirements. The association offers a multitude of CPD courses across the country each year in addition to conferences and other events. Members must record and submit their CPD hours and may do so via an online system. CPA Australia will review a sample of CPD records.
SMO 3: International Standards on Auditing
In Australia, the applicable auditing standards are issued by the Auditing and Assurance Standards Board (AUASB), an independent, statutory agency of the Australian Government. Since April 2006, the AUASB has released Australian Auditing Standards (AAS) based on the ISA as issued by the IAASB, meaning that the 2016 ISA—which include the new auditor’s report—are in effect.
CPA Australia is committed to supporting the ongoing adoption and implementation process of AAS that align with ISA. In this regard, CPA Australia reports that it is represented at all AUASB meetings and participates in roundtable consultations. The association will also notify of members of consultations and exposure drafts in order to provide comments when requested.
To support its members with implementation, the association has a variety of accessible tools, templates, and resources on its website related to audit and assurance. This includes a dedicated section on the enhanced auditor’s report as well as specific pages with resources and guidance on audits for small- and medium-sized entities and non-profits. Furthermore, CPA Australia regularly offers in-person and online continuing professional development training that covers audit and assurance topics and indicates it makes amendments as necessary to its CPA Program.
The association emphasizes that it in the coming year it will continue to raise awareness and assist members with the application of the latest ISA, such as ISA 540 which will be released in September 2018. In the previous year, it has hosted events to promote the 2016 ISA and generated other communications to raise awareness and understanding such as the production of a podcast entitled “Enhanced auditor reporting: Are you prepared?” with speakers from the IAASB and AUASB; contributed opinion pieces in local and international press; and communicating new developments via its newsletter and website. Additionally, CPA Australia also intends to facilitate discussion and feedback on new IAASB consultations, including Invitation to Comment on Professional skepticism, Audit Quality, and Group Audits.
SMO 4: Code of Ethics for Professional Accountants
The Accounting Professional & Ethical Standard Board (APESB), an independent body that was established in 2006, sets the ethical requirements with which all professional accountants working in Australia must comply. The APESB has issued the Accounting Professional & Ethical Standard (APES) 110 Code of Ethics for Professional Accountants, which is based on the IESBA Code of Ethics and was recently updated in September 2017 to incorporate the 2016 IESBA Code of Ethics, emphasizing the changes due to NOCLAR.
CPA Australia reports that it is active in supporting the APSEB’s adoption process by attending APESB meetings; participating in taskforces and roundtables; and seeking members’ comments before making submissions to exposure drafts issued by the APESB and the IESBA.
The association employs similar efforts to support its members in understanding and applying the ethical requirements, such as hosting events and training; issuing communications through its newsletters and website; updating its CPA Program accordingly; and providing implementation support and guidance on ethical behavior and common ethical challenges and obligations in the workplace. For example, the association operates ‘ HYPERLINK "http://www.ethics.org.au/ethi-call/ethi-call" Ethi-Call’—a free ethics counseling hotline.
Additionally, CPA Australia also notes that it communicates with stakeholders in the private sector, government, and regulators regarding the Code of Ethics.
SMO 5: International Public Sector Accounting Standards
Financial reporting for public sector entities in Australia is based on the Australian Accounting Standards (AAS) adopted by the Australian Accounting Standards Board (AASB)—an independent Australia government agency. The Australian Accounting Standards incorporate and comply with IFRS and include a specific standard for public sector accounting. The AASB’s transaction neutrality policy means similar transactions and events are accounted for in a similar manner by all entities. The professional accountancy organizations in the jurisdiction report that when relevant for not-for-profit private or public sector entities, the AASB will seek consistency with IPSAS; however, no plans to adopt the IPSAS have been announced.
In this regard, CPA Australia reports that it supports the AASB’s activities in aligning the AAS with the IPSAS where appropriate. CPA Australia invites its membership to comment on the AASB and IPSASB-issued exposure drafts and share its views as part of the process in developing CPA Australia's response. The institute notes it also participates in the technical briefings of the IPSASB board member nominated by CPA Australia and CA ANZ, and where relevant, provides opportunities for the Australian Board Member of the IPSASB to present at CPA Australia events.
In addition to events organized by CPA Australia that relate to public sector accounting, the institute has a library of tools, resources, and research, along with regularly offered training and a support network for its members that work in the public sector.
SMO 6: Investigation and Discipline
Investigative and disciplinary (I&D) procedures for professional accountants in Australia are carried out by the Australian Securities and Investment Commission (ASIC) and three professional accountancy organizations (PAOs) in the jurisdiction. The ASIC is charged with carrying out these procedures for registered company auditors while the PAOs implement I&D systems for their respective members.
Any complaints against CPA Australia members may be submitted to the General Manger, Professional Conduct (GMPC) who will then refer the complaint to investigation by a Professional Conduct Officer (PCO). Based on the findings of the investigation, the PCO and GMPC may refer the case to the Disciplinary Tribunal which will issue sanctions if necessary. Disciplinary Tribunal decisions may be appealed to the Appeals Tribunal. Further detailed information on CPA’s Australia’s I&D process is outlined within its bylaws—which were amended in 2017—and the association reports that it reviews its procedures to confirm continued alignment with the SMO 6 requirements on a regular basis. Amendments to the bylaws in 2017 introduced a Professional Conduct Oversight Panel (PCOP) to further strengthen the independence and oversight of I&D procedures. For instance, in cases where the GMPC has a conflict of interest, the PCOP will determine appropriate next steps.
CPA Australia notes that it strives to ensure its members are informed of all provisions of the ethics code and other applicable professional standards along with the consequences of non-compliance through an appropriate communications plan, which includes its CPA Program and holding informational sessions. In the interest of transparency and raising public awareness, the association also details the process of making a complaint and results of all disciplinary proceedings on its webpages.
SMO 7: International Financial Reporting Standards
The Australian Accounting Standards Board (AASB), an independent Australian Government agency, sets the corporate accounting standards for the jurisdiction. There are two tiers of reporting requirements for preparing general purpose financial statements with Tier 1—known as the Australian Accounting Standards (AAS)—incorporates the IFRS while Tier 2 is based on the IFRS for Small- and Medium-sized Entities.
CPA Australia reports that given its lack of authority in this area, it focuses on using its best endeavors to promote the incorporation of the IFRS into AAS and support the implementation of applicable standards by its members. For example, in regards to standard-setting processes, the association explains that it will notify of members of both newly issued standards and consultations and exposure drafts issued by the AASB and IASB in order to submit comments.
CPA Australia assists its members with a variety of accessible tools, templates, and resources on its website related to financial reporting. This includes: podcasts on the latest standards, a factsheet outlining the IFRS requirements and those of the AAS that are specific to Australia, research driven by the association, and guidance specifically tailored for not-for-profit entities. Furthermore, CPA Australia regularly offers in-person and online continuing professional development training that covers financial reporting topics and indicates it makes amendments as necessary to its CPA Program.
Additionally of note, the association also provides guides for the general public to better understand the information contained within annual reports and an auditor’s report on financial statements.
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