More notorious accountants face the music
"The Institute of Chartered Accountants needs to take some responsibility and establish a fund to compensate the public who have suffered loss at the hands of its members."
Featured commentBridgecorp’s jailed chief financial officer Rob Roest is among a handful of accountants facing disciplinary action today.
Roest is joined by Five Star Finance’s Anthony Walpole Bowden, sentenced in June to nine months' home detention and ordered to do 400 hours of community work after pleading guilty to two theft charges brought by the Serious Fraud Office.
Roest is serving six years and nine months in prison after being found guilty earlier this year in relation to the collapse of Bridgecorp and his role in buying a luxury launch using $3.5 million of company funds.
It is expected Roest and Bowden will be struck off.
Five accountants face disciplinary action by the Institute of Chartered Accountants.
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Comments and questions29
The New Zealand Institute of Chartered Accountants needs to take some responsibility and establish a fund to compensate the public who have suffered loss at the hands of its members. This might help restore public confidence in a profession responsible for all the disclosure fraud in the finance industry.
Please don't be silly, I, and I believe, the general public, have had a gutsful of bailing out witless greedies, who are for ever getting sucked in by shiney a*sed shysters.
Lifes lessons need to be paid for if they are to be learnt.
Looking at the number of dislikes of that comment it is clear that plenty of accountants read NBR
Anyway the Institute has been there done that - too dear and too much hassle I'm afraid. Gave it up 20 plus years ago after a $12m payout that cost every holder of a Certificate of Public Practice $3500(as I remember)
The John Graham affair - which bankrupted his two innocent partners in practice, put the fidelity fund so far into the red that CPP holders were levied the $3,500. In his case, Graham committed a deliberate scheme of fraud by establishing separate accounts to channel funds to a failing business that he owned distinct from the partnership, used his standing in the community and his church to lure gullible investors with high returns in a classic Ponzi scheme.
The question remains then as now what has someone in the business of borrowing and lending money have to do with the business of providing accounting services. Why should a person who happens to be an accountant and commits fraud be bailed out by someone else with little or no oversight or jurisdiction over their business and no regulatory framework to operate under...?
That's like saying every road user should fund everyone else car crashes if they are a licenced driver who commits a crime such as drunk driving (although to an extent they do with ACC levies), isn't it?
Sounds like Mark Hubbard.
There did use to be a Fidelity Fund back in the day, but it was taken away when the law was changed to let anyone call themselves an Accountant (as opposed to a Chartered Accountant).
Why should law abiding accountants have to pay for the acts of their colleagues? Do you expect the Institute of Directors to pay compensation for all the company directors who've done wrong?
If accountants want to repair their credability in New Zealand, the Institute needs to seriously consider doing something not unlike the legal profession.
How many complaints have you been involved with against lawyers.
Obviously none because if you had been,you would know that NZICA will strike you off while the Law Society will give you a $500 fine for a similar offence.
Absolutely 100 per cent correct.
Chartered Accountants in public practice are monitored regularly and rigourously by the Institute. The problems seem to occur when they move out of public practice and into directorship roles. Your comment would be better directed to the Institute of Directors than the Institute of Chartered Accountants.
An excellent comment.
Not all directors of failed finance companies are members of NZICA.
You cannot expect a fidelity fund to cover deficits of this magnitude.
What was required was more robust regulation from government,which we have in fact now seen put in place.
I might point out that financial planners have largely escaped from retribution.
The institute requires that those who are in public practice have adequate professional indemnity insurance. Typically, those who have been involved in the finance company shenanigans have not been in public practice, and the only power the institute has over them is to name them and strike them off.
Using the rationale of poster #1, perhaps the institute of directors should be setting up a fund to cover dodgy directors. The downside is that both institutes are voluntary, the membership fees would go sky high, and the fraudsters wouldn't sign up to them anyway.
Correct
#1 - an incredibly naieve comment. You can't point the finger at an entire profession and punish all the good apples just because of a few bad ones. That's like saying one dirty cop makes the whole police force bad.
An incredibly naieve comment. You cant expect the good ones to be trusted unless the institute does it's job punishing the bad ones
You are inferring that NZICA do not punish the bad ones.
That is incorrect and naive.
They take all complaints very seriously.
Produce your evidence to prove otherwise.
I wonder if all the Mum's and Dad's who lost their life savings over the past 5 years because of accountants acting fraudulently have the same sympathy for the accounting profession.
Again, another naieve comment. Did they receive financial advice? Did they apread their investment risk or dump all their finds into a now failed finance company? And what about the investment advisors? Or the directors of the company? (most of whom are not accountants). Of course its a lot easier to point the finger and make your long standing local Chartered Accountant the scapegoat for these failures....
Fred speaks with knowledge,common sense and logic.
Produce your long list of the accountants who have acted fraudulently to cause mums and dads to lose their life savings over the past five years.
They should be easy for you to identify because they will have all been in court and struck off NZICA.
Then produce a list of non accountants and financial planners who have done the same.
Fred if the Institute does not do it's job of maintaining public confidence, then of course the finger will be pointed at the entire profession.
Maybe its about time to weed out the dross from the profession then,cos a lot seem to be slipping through to the courts.One dirty cop can taint the whole police force,so they become a muddy grey in the public's opinion.With accountants,chartered or not they smear everyone else,when they go bad.
You're right. One bad apple can taint a professions image, but at the end of the day if you're in trouble you're still going to call them aren't you, whether it be the police, a lawyer, accountant, doctor etc etc etc
NZICA do act on complaints.
You are waffling about nothing.
The Institute is taking "action" after the damage is done. How come they pick up the crooks before they grow into bigger crooks? I thought the Institute did practice reviews... what do these reviews achieve other than a multi-million dollar income stream for the Institute?
The police do not pick up the crooks before the deed is done.
An auditor is a watchdog not a bloodhound.
Practice review is conducted within a limited budget and timeframe.
The cost to each practice is peanuts.
There is simply insufficient time in a one or two day review to undertake a wholesale investigation.
But material procedural deficiencies do surface over time.
i think a major issue in nZ is that the public are reluctant to lay complaints,probably because to lay a compliant with the likes of the Law Society historically has achievedno more than a slap with a feather.
As for crooks who are NZICA members,there are in fact very few,as the courts and NZICA discilplinary website will demonstrate.
I suggest you name a few that you have in mind in order that we can understand where you are coming from.
I would also remind you that Practice Reviews cover CA Practices only.
I long ago gave up on being a member of the Institute. Nothing but hassles and excessive cost - for no return whatsoever.
The only reason to be a CA is so someone can pretend to be professional and up their fees accordingly.
Good accountants have indemnity insurance, continuing education and don't handle client funds! You don't need to be a CA to do that.
Mark Hubbard is back.
If you want to work with any professional credibility,then a CA qualification is essential.
I am aware of bankers who will not accept work from non CA practices.
Professional bodies in any sphere are essential if that profession is to progress.
There are those like anon who will contribute nothing,let the governing bodies do all the hard yards,and sit back to reap the rewards.
Likewise I believe in compulsory trade union membership.
In regard to CE,anon should not demean himself by attending,as of course all of the CE in NZ is produced by CA practices.
As for handling client funds,anyone who is involved in taxation work,handles client funds.Can't avoid it,and no problem in doing so.
As for PI insurance,I cannot see your point.
i know of a non CA practice that pays a CA practice a fee per file to sign off their work.
Their previous alternative was to have a CA working in house to check their work.
The reason being credibility when dealing with the outside world.