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An attempt to rally support for a spill motion at the upcoming AGM has lost its outspoken leader.
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CA ANZ member abandons campaign against board
28 July 2022
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An outspoken CA ANZ member who was rallying support for a spill of the board at its upcoming AGM has decided to back down, despite substantial member support.
In a brief email to Accountants Daily, Tony Alizzi said he was abandoning the campaign and had apologised to the CA ANZ chairman and chief executive over critical comments reported last week.
The comments were motivated by CA ANZ’s handling of the KPMG exam cheating affair, which Mr Alizzi described as “the biggest scandal in the profession in living memory”.
The cheating first emerged two years ago and resulted in a US regulatory body imposing a US$450,000 fine on KPMG and internal disciplinary measures for some of the hundreds of employees known to be involved.
Following the fine, 422 CA ANZ members were investigated by the body’s independent professional conduct committee (PCC) and the result, published on 13 July, was unspecified sanctions against eight unnamed members.
CA ANZ simultaneously announced a Professional Conduct Framework Review “to ensure our by-laws and standards are robust and remain in line with best practice”.
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Despite this, CA ANZ was forced to defend the timing and result of its investigation as reported by Accountants Daily on 19 July.
CA ANZ said it was obliged to await the outcome of the US inquiry before commencing its own investigation, that its PCC acted independently of the board and CEO, and its by-laws specified confidentiality in this case.
“CA ANZ does not tolerate cheating and CAs have been disciplined in this issue as has KPMG,” a CA ANZ spokesperson said this week.
“While all our members are entitled to their views and we encourage feedback and debate, we absolutely refute any characterisation or commentary that attributes decisions of the PCC to CA ANZ’s management or board.
“The PCC and the other disciplinary bodies are, by design, independent of management to remove any potential conflicts of interest or influence. The disciplinary bodies carefully consider all cases and have a separate oversight committee to administer them, which follows global best practice, including meeting global standards and International Federation of Accountants requirements.
“Our members would rightly be greatly concerned if management decided to breach our by-laws and interfere with the PCC’s process, deliberations or findings, to deliver ad hoc disciplinary action.
“A comprehensive review of the Professional Conduct Framework has been announced and we encourage members to engage with this.”
However, many of the readers’ comments generated by the Accountants Daily reports last week went to broader accusations, including that cheating was widespread and an open secret but ignored, that CA ANZ failed to act with appropriate haste, and that it preferenced the big four accounting firms.
“I’m surprised CA ANZ did anything – I assume the US investigation forced their hand,” said one anonymous correspondent. “I did my CA 12 years ago, and it was well known then that multiple Big 4 candidates cheated in each subject. Nothing was ever done.”
In line with Mr Alizzi, a former CFO who is operations director Asia-Pacific Japan at Hewlett-Packard in Singapore, many felt the handling of the exam scandal reflected badly on all members of the professional body and went to more general concerns over leadership.
The confidentiality of the KPMG offenders angered many, and one reader referenced paragraph 12.6 of the CA ANZ by-laws, which suggests it had discretion about whether to name the offenders and chose not to exercise it.
12.6 Where the Professional Conduct Committee commences an investigation CA ANZ is entitled in its discretion to publicise the fact that an investigation is or has taken place, and to publicise (including details of the name and location of the Member and that Member’s Practice Entity) the status and/or outcome of that investigation.
Following the report of reader criticisms, Accountants Daily requested CA ANZ respond to a number of claims, including that:
- Exam cheating had been going on for years and was widely known, and ignored.
- CA ANZ had failed to act with appropriate haste and in proportion to the seriousness of the KPMG matter.
- That there is systemic bias within CA ANZ that results in it treating large firms more favourably than small practices.
Accountants Daily also asked:
- In light of a recent finding by the US SEC that there was a similar problem at EY, how confident is CA ANZ that the Australian problem is confined to KPMG?
- Will CA ANZ make public the letter it sent to KPMG staff outlining its ethical concerns?
- Has any member resigned their membership of CA ANZ over this matter?
Accountants Daily has yet to receive responses to these questions.
Following the report on 22 July of the campaign by Mr Alizzi, CA ANZ accused Accountants Daily of “misrepresentations” and said the “story lacks both accuracy and balance”.
At the request of CA ANZ, Accountants Daily inserted a reference back to its earlier report on 19 July and deleted mention of a board member who is an audit partner at KPMG.
Accountants Daily understands that Mr Alizzi will no longer be commenting on the matter.
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