The Association of Chartered certified Accountants is a recognized British statutory accounting body responsible in creating certified accountants worldwide. It is one among the fastest growing accounting bodies with nearly 140000 members and 404000 affiliates as well as students from 170 countries. This data is according to the March 2010 statistics. The head office is situated in London and the administrative office in Glasgow. Moreover the institute has a wide network involving 80 staff offices around the world. the institute is the founder body of the Consultative committee of accountancy bodies and the International federation of accountants The term Chartered in the qualification given by the institute was granted by the Queen in the year 1974. Persons who wish to be called certified public accountants should hold the degree given by the institute. Moreover they should comply to and regulations framed by the institute. The Association of authorized public accountants is one of the subsidiaries of the ACCA (ACCA- The global body of professional accountants. 2010).
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The Certified public accountants or CPA is the certified body of public accountants in the US. In US only persons having qualified CPA degree is authorized to attest and audit financial statements. How ever many states in the US have a lower tier of accountants that are below the normal CPA. The public accountants in the US belong to the national society of public accountants. As per the law prevailing, other persons who are not CPA's are prohibited from using the designation of a public accountant. The main functions of CPA's includes assurance services, financial consultancy services etc. they are also an important person in the income tax area (American institute of CPA's. 2010).
In Australia, it is the Institute of chartered accountants of Australia which performs all the statutory functions of an accounting body. It has more than 50000 members and over 12000 students worldwide. The institute is also the founder of the Global accounting alliance. The institute was formed as per the royal charter in 1928 (Chartered Accountants, The spirit of being number one. 2010).
Breach of violation cases:
The institutes of chartered accountants across the globe have stricter rules for its members for keeping discipline. The institutes expect each and every member to follow these rules and stick on to professional ethics without any compromises. In spite of these stricter rules, there have been violations by its members also. One major case of violation is that of Mr. Stephen Charles Peck, FCA, who is a chartered accountant in Britain. The member was found guilty of bringing discredit to the institute and profession. He was liable under disciplinary action under the byelaw (4)(1).(a).On July 24th 2008, the Grantham Magistrates court convicted Mr.Peck on the charges that he obtained financial assistance under the rural enterprise regulations 2000, on the basis of a false and misleading statement. After many hearings, it was found that Mr. Peck was guilty in doing such an act which polluted his profession. However the court admitted that there were no real purposeful attempts by the person to do such acts, he did that as a result of criminal recklessness as well as irresponsibility. Mr Peck was imposed a conditional discharge of 12 months and was also ordered to pay costs amounting to 10437 pounds. Mr peck was severely reprimanded under the violation of bylaw (4)(1)(a).he was asked to pay a fine of 2000 pounds and costs amounting to 2300 pounds .Under the laws of the British chartered accountants institute, if a person is found to have committed an act or a default that is likely to bring discredit on the institute and profession as well as if there is breach of regulations, such person is liable for punishment. He may be suspended and his practice certificate may be withdrawn (Disciplinary orders and regulatory deciscions.2009).
Breaches of code of conduct have been reported from US also. In another spectacular case, a CPA from Greenwich was barred from conducting his professional duties and his certificate was withdrawn by the Connecticut state board of Accountancy. This was because the CPA withheld the client's tax records. The CPA who committed this crime was John.P. Vancho. He was ordered to surrender his certificate and to pay 1000 dollars as penalty. It is interesting to note that AICPA has disciplined 327 cases of breach of conduct by its members during the time period of 1998- 2008. Out of this majority of cases are involved with filing false returns with income tax department. All these violations invite strict penalties as in the case of JohnVancho (Dan.2004).
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In Australia, the ICAA (institute of chartered accountants in Australia) and the CPA (certified practicing accountants) are the important bodies which frame the code of conduct. They have stricter rules and regulations that govern the accounting field of that country. Non compliance with the code invites disciplinary proceedings including removal of licences as well as payment of compensation to the client. In a fraudulent practice, an accountant in a reputed business firm was found guilty of conspiring with others by helping them to evade 27.78 million Australian dollars during 1999 and 2006. The accountant Mr. Thomson used false documents deliberately to hide actual profits generated by his clients through this action, he ensured that his clients need not pay the requisite taxes to the Australian government. According to the rules and guidelines framed by the Australian institute of certified accountants, those accountants who indulge in such unethical practices are liable for investigation and prosecution under the law. The accountant was arrested by the Australian police and tax authorities (Accountant jailed over part in fraud. 2008).
The Australian institute of chartered accountants is a strict legal body which takes all necessary steps to ensure that the highest professional ethical standards are maintained by its members. For enforcing this, strict legal provisions are applied by the institute on its members. Those who fail to comply with these standards will be forced to face disciplinary actions that may vary according to the degree of violation committed. The institute is not a regulator or court but has a major role in setting high standards for its members. The Australian institute's disciplinary process is fair, rigorous as well as independent. Breaches of conduct are subject to independent hearing by the professional conduct tribunal. The non-satisfied member also has the opportunity to approach the appeal tribunal. The outcomes of the tribunal are printed in the institute's magazines and its online versions.
Different types of sanctions that the tribunal is authorized to impose are cancellation of membership up to a period of five years, withdrawal of the right to public practice, imposition of fines up to 100000. And other sanctions such a remedial training and additional quality review of the members practice. In the above case, the accountant was reprimanded by the institute and he was made liable. The liability was in the nature of criminal liability. Moreover the institute temporarily cancelled the accountant's membership also (Annual report on professional conduct. 2007).
Another predominant accounting institution in the global accounting scenario is the Institute of chartered accountants of India. The institute was established in the year 1949 under the chartered accountant act of 1949. It is a statutory body for the regulation of chartered accountants in India. It is now the second largest accounting body in the whole world. Its contribution ranges from education, professional development as well as maintenance of high ethical, auditing and accounting standards. The institute imposes strict disciplinary action on its members for non-compliance of its rules and regulations. For this purpose it has formulated a disciplinary committee which is specially entrusted to look into such cases. For those members who were found guilty, rules and penalties under section 21 of the chartered accountants act would be applied. These persons will be permanently disqualified from service according to order of the high court connected in this regard. The punishment may vary according to the nature of misconduct. It can be a reprimand, temporary suspension of membership or permanent removal along with imposition of fine. In a spectacular case of misconduct by a practicing chartered accountant in Pune, Mr. R.D. Pawar, who was found guilty of serious misconduct, the institute applied the section 21 and the chartered accountant was removed permanently from the members list. Another member, Mr. L.N.Mittal was removed for 1 year for his disciplinary violations by the institute. He was found guilty of helping a client in evading tax. The chartered accountant was located in Gujarat. The institute was again in the news recently when a huge corporate scam involving multinational company Satyam computers was surfaced. The accounts of Satyam computers were forged with the help of their auditors M.S Price water coopers. The scam was brought into light and the company and their auditor's were found guilty for the misconduct. The institute banned Price water coopers from practicing anywhere in India (List of cases as on 5th May, 2010. 2010).
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All the global accounting bodies have framed strict rules to deal with disciplinary violations by its members. Although the rules and penalties are similar between all these bodies, there are variations in the intensity and procedures of convicting among these bodies. For ACCA and CPA, there is a strict code of conduct. The institute of certified accountants in Australia have gone further by adding the clause of civil and criminal liability apart from the normal penalties imposed by the institute. As far the Institute of chartered accountants of India is concerned, it has one of the lengthiest acts, i.e. the chartered accountancy act for administration. Breaches of professional conduct are scanned by the disciplinary committee before the verdict is given. The common rules followed by all these accounting bodies include permanent removal from the members list, temporary suspension, reprimanding, remedial training etc.
It is quite clear that all the accounting bodies are trying hard for improving the services and professional conduct worldwide. For their better and enhanced performance, the following suggestions are worth noting. They are restoring integrity for all professional accountants; this includes maintaining straightforwardness and truthfulness, and keeping good business relationships with clients. It is also essential to maintain objectivity because it creates an obligation on all the professional accountants never to compromise their judgment on the basis of bias, conflict, interests etc.
All professional accountants should have professional competence and due care. This is very much important for maintaining the professional knowledge as well as skill at the desired levels. Moreover based on this knowledge, the clients and employees should receive expert and efficient service. When professional services are provided, it is also important to act diligently in accordance with the technical and professional service.
The professional accountants should be fully aware of the recent business developments and technical changes taking place across the globe. They could perform competently only if they have the up-to-date knowledge. The institutes should also take necessary steps to ensure that the professional accountant receives proper training so as to enable himself to deliver expert and satisfying services. It also important to make awareness among the clients that there are inherent limitations to the services given by the accountant.
Another important aspect that has to be seriously considered is the concept of confidentiality. This principle refrains the accountant from disclosing confidential information outside the firm. He should maintain secrecy even under social conditions.
The need of maintaining confidentiality should continue even after the relations ends with the client. Even when the accountant changes his profession, the confidentiality should be restored. He can however disclose information if the law permits him to do so and if the permission is given by the client. Last but not the least, the professional accountants should be imposed a code of professional behavior to be followed on. This would enable them to comply with different laws and procedures and avoid any action that would really discredit their profession (Professional roles and responsibilitiesof different professional groups 2006)..
Professional bodies like ACCA, CPA, AICA, ICAI etc have become global accounting bodies. With the growth of the business environment, the need for effective and truthful accounting products and services is on the large. Moreover the growths of business have also resulted in increase of unethical practices of profiteering. Men and business are governed by greed alone now. To overcome this adverse situation and protect the interests of investors, government and the common man world wide, it is important to have a decent law and regulation coupled with clarity and honesty. All these institutes can join together and attain these objectives.