The Rationale 
Procedure For Complaints About Members' Conduct 
Dispute Resolution and Compensation 
Professional Conduct and Appeal Tribunals 
Limitations on the Institute of Chartered Accountants in Australia's role 
The relationship between the Institute of Chartered Accountants in Australia's disciplinary process and other disciplinary and regulatory processes 
Sanctions  
Appeal Process 
Reporting Process 
 
The principal purpose of this Policy Paper is to state for the benefit of members and the community, the rationale behind the Institute of Chartered Accountants in Australia's disciplinary procedures, and the outcomes sought to be achieved by these procedures. A secondary purpose is to provide guidance concerning the Institute of Chartered Accountants in Australia's approach to conduct issues, for the benefit of its members appearing before disciplinary tribunals, those advising them, and the tribunals themselves. Finally, the processes, and some of the factors which can delay the handling of disciplinary issues, are explained. 
 
The Rationale 
 
The Institute of Chartered Accountants in Australia is committed to maintaining its status and recognition as the leading body of professional accountants in Australia. The achievement of that objective depends in large part on ensuring that its members meet the standards of professional conduct and performance that should be and are expected of leading accounting professionals. Membership of the Institute of Chartered Accountants in Australia ought to be seen as a privilege, not an entitlement, and a privilege which carries with it the obligation to conduct oneself properly at all times and not bring the Institute, and thereby its other members, into disrepute. The protection of the reputation of the Institute of Chartered Accountants in Australia and its membership therefore entitles and requires the Institute of Chartered Accountants in Australia to call its members to account when issues of concern arise. The Institute of Chartered Accountants in Australia promotes high standards of conduct and performance in various ways, including through such means as the Code of Ethics (issued by the Accounting Professional and Ethical Standards Board) and other regulations, incorporating ethics into the Chartered Accountant Program, providing a counselling service and operating a formal complaints and disciplinary process.  
 
Procedure For Complaints About Members' Conduct

• When the Institute of Chartered Accountants in Australia receives a complaint about a member’s professional conduct, the member is provided with a copy of the complaint and asked for a response. A copy of the response is then provided to the complainant. The majority of complaints arise from a misunderstanding about the accountant's actions, or a communication breakdown between member and client, and therefore do not result in formal disciplinary action.
• Where matters concerning a member's conduct come to the Institute’s attention that do require further examination, such as a referral of the member to the CALDB, or an adverse finding by that body, the member is requested to provide an explanation and any background information that may assist the Institute of Chartered Accountants in Australia to determine whether disciplinary action is justified
• Where formal disciplinary action is taken, the complainant is advised of the Professional Conduct Tribunal's decision, including any sanctions imposed, at the conclusion of the process.

• Under the Australian professional and regulatory framework anyone can provide "accountancy services" – they do not need to be a member of a professional body, and only require a "licence" from the appropriate regulatory authority to carry out specific services such as company audits or liquidations, or act as a tax agent.
• Accordingly, the fact that a member has been excluded or membership has been cancelled does not mean that they may not continue to provide accountancy services. It requires some action such as ASIC or the Tax Agents Board cancelling their registration, to prevent them continuing to practice as company auditors, liquidators or tax agents. However, they can no longer use the Chartered Accountant designation.
• Under the Corporations Law the power to regulate company auditors and company directors is vested in the ASIC. Only the CALDB can cancel an auditor's registration and the ASIC has various powers to deal with directors who have not fulfilled their legal responsibilities

• All CALDB decisions concerning the conduct of registered company auditors or liquidators who are Institute of Chartered Accountants in Australia members are referred to the Institute of Chartered Accountants in Australia's Professional Conduct Tribunal.
• Where ASIC has taken action against a company director who is a member, the Institute of Chartered Accountants in Australia also considers what, if any, action would be appropriate.
• In the past, the Institute of Chartered Accountants in Australia has been criticised for not taking immediate disciplinary action in response to major corporate failures where a member has been involved as auditor or an officer of the company.
• While it might sometimes be possible for the Institute of Chartered Accountants in Australia to conduct a limited parallel investigation to any enquiries being conducted by the ASIC or other regulator, its powers are limited. The statutory regulator has powers of compelling the production of documents and interviewing witnesses, which the Institute of Chartered Accountants in Australia does not have, and in any event the regulator would always take precedence. The Institute of Chartered Accountants in Australia policy has therefore been to await the completion of the investigation by the statutory body and any subsequent disciplinary or other legal action. The Institute of Chartered Accountants in Australia then considers what impact the findings should have on the member's standing with the Institute of Chartered Accountants in Australia and whether the member should be referred to a Professional Conduct Tribunal to determine whether any additional sanctions should be imposed.
• Where civil legal action is taken against a member, while it is possible for a statutory body such as ASIC and CALDB to carry out its own investigation and disciplinary action during the court action, the Institute of Chartered Accountants in Australia has been advised that it cannot do so without a high probability of being in contempt of court.
• Where a civil action results in a "confidential" settlement, usually without any admission of fault by the member, the Institute of Chartered Accountants in Australia will examine publicly available evidence to ascertain if disciplinary action is appropriate.
• The fact that civil legal action is taken against a member and is settled, is not conclusive evidence of fault. The conduct of the case, whether or not to settle, and the terms of settlement are usually dictated by the member's insurer. The existence of professional indemnity insurance very often results in legal action being taken against the auditor of a failed entity, rather than its directors who often have limited if any resources.

• Sanctions are primarily designed to reflect the impact of the member’s actions on the reputation of the Institute of Chartered Accountants in Australia and its members, rather than to punish the individual member. For example, where a member has been convicted of a criminal offence, or has been found by a court or other tribunal to have acted dishonestly, the Institute of Chartered Accountants in Australia has no role in further punishing that member for the actions that lead to that finding, but is entitled to call on the member to account for the impact it has had on the member’s standing with the Institute and the reputation of the Institute itself.
• The ultimate sanction is exclusion from Institute of Chartered Accountants in Australia membership and withdrawal of the right to use the Chartered Accountant designation. This sanction is appropriate if the member has behaved in such a way that their continued membership of the Institute of Chartered Accountants in Australia would bring discredit on all other members, and the Institute itself, or the member's conduct is such that it is clear that he or she is no longer a "fit and proper" person to be a member.
• Where the member's conduct is such that exclusion from membership is not justified there are a variety of lesser sanctions that may be imposed, including cancellation of membership for a specific period, withdrawal of the right to engage in public practice, fines and reprimands.
• Where the transgression relates to a member's professional performance, judgement or competence rather than their conduct a range of other "remedial" sanctions may be imposed, including additional continuing professional education or a quality review of the member's practice.
• It may be appropriate in some instances where the matter does not reflect any deliberate or reprehensible behaviour by the member, but has arisen from circumstances beyond their control, or where it appears that it is an isolated instance and unlikely to recur, for no sanction to be imposed.

• When a case has been found to be established by the Professional Conduct Tribunal, the member may appeal against the findings or any sanctions imposed.
• The complainant does not have a right of appeal (as the disciplinary action is a matter between the Institute of Chartered Accountants in Australia and its member) but the President, on behalf of the Institute of Chartered Accountants in Australia, can appeal against the Professional Conduct Tribunal's decisions.
• Appeals are heard by a separately constituted Appeal Tribunal, which can affirm, set aside or vary any of the Professional Conduct Tribunal's decisions.

• A report of each case, including the member's name and sanctions imposed, is published in the Institute of Chartered Accountants in Australia’s journal and on the Institute of Chartered Accountants in Australia website.
• The reporting of cases, alerts members to the need to observe the Institute of Chartered Accountants in Australia's regulations and standards of conduct and performance.