The IPA yesterday announced it would not adopt APES 230, which it has long campaigned against, saying it goes further than what is required under the law and is impractical for members.
Instead, the institute said it would be implementing Pronouncement 11: Financial Planning Services in place of APES 230, which it said addresses the public interest because it is compliant with Future of Financial Advice changes, with IPA professional standards and with the APES 110 Code of Ethics.
It also has requirements around mandatory continuing professional education, an “extensive” quality assurance review process and addresses the IPA’s complaints, investigation and disciplinary system, the IPA stated.
In response, CPA Australia and the Institute of Chartered Accountants Australia (ICAA) issued a joint release describing the IPA’s approach as “disappointing”.
CPA Australia chief executive Alex Malley FCPA said the implementation of APES 230 will lift the value of financial advice Australians receive, with the two bodies reaffirming their commitment to the implementation of APES 230.
“The APESB sets the standards and ethics for Australian professional accounting bodies, which aim to reflect the high expectations of consumers and the role of the profession to act in the public interest,” Mr Malley stated.
“The release in April this year of the APES 230 standard followed more than five years of public and industry consultation.
“It is disappointing, therefore, to see the IPA adopting its own standard, rather than accepting a standard set by an independent body acting in the public interest.”
ICAA chief executive Lee White FCA said that as the independent standards setting body, it is appropriate for the APESB to set the framework for all professional accountants.
“During the consultation period we engaged with members and industry stakeholders to get a thorough understanding of the issues. We’re now comfortable that the final standard reflects and addresses the practical issues raised during the consultation period,” he said.
The APESB itself also weighed in, pointing out that the final shape of APES 230 was based on more than five years of public consultation with stakeholders, which included extensive engagement with each of the three major professional accounting bodies.
“APESB is disappointed that the IPA has issued Pronouncement 11: Financial Planning Services as an alternative to APES 230 for its members,” APESB acting chair Stuart Black said in a statement.
“It is the expectation of the APESB that members of the three professional accounting bodies will adopt and implement all APESB standards and that those accounting bodies will monitor and enforce their respective members’ compliance with these standards.”
He said the APESB had encouraged the IPA not to issue its alternative standard and has advised that each of the three professional accounting bodies “is expected to support all APESB standards to maintain a strong and effective co-regulatory framework”.
“It weakens the reputation of the entire Australian accounting profession if one of the major professional accounting bodies allows its members to opt out of one of APESB’s standards in favour of another standard of lesser quality,” he added.
Responding to the criticism, IPA chief executive Andrew Conway said the IPA board believes it has acted in the best interests of its members.
“We have consulted extensively and made our position clear in relation to this issue,” he said.
“We will not comment on what other bodies are doing or not doing, suffice to say that we believe it is in the public interest to ensure there is no gap between the provisions of the law and the professional and ethical standards thereby reducing the risk of regulatory arbitrage.”
With the newly elected Coalition government reaffirming plans to repeal the ‘opt in’ provisions, Mr Conway said it seems the “goal posts have moved”, but reiterated his belief the additional disclosure requirements and extended opt-in provisions would not add to consumer protection.
“We respect the position of the APESB as outlined in November 2012 when the final draft was issued; it was modified substantially and reissued earlier this year. However, we remain concerned with the practical implications of systems changes and the potential widening gap between the law and the professional standards,” he said.
“The IPA pronouncement, together with the FOFA requirements, the Code of Ethics of Professional Accountants, the mandatory education requirements, enforcement and disciplinary provisions and professional indemnity requirements are just some of the ways we work very hard to protect consumer confidence and protection.
“Nothing we have done, nor will do, will ever work to reduce protections. On the contrary, our aim is to ensure the Australian public continues to have access to high quality affordable financial advice to ensure they continue to plan for their futures.”
