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Update on the operation of limited liability schemes for Public Practitioners

What kind of things would members actually want CPA Australia to focus on vs what are they actually doing
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perthcpa
Posts: 15
Joined: Mon Jun 26, 2017 12:03 pm

Update on the operation of limited liability schemes for Public Practitioners

Post by perthcpa » Tue Jul 25, 2017 11:34 am

Everyone getting this email?

CPA Australia advise:

'Further to our communication with you on 27 June, we can advise that the PSC has confirmed a new scheme will not be in place prior to 8 October 2017. This will affect CPA Australia Public Practitioners nationally.'

and then say

'Public Practitioners will be aware that it is a requirement of holding a Public Practice Certificate to have Professional Indemnity Insurance coverage that meets the requirements of CPA Australia’s By-Laws. The PSC announcement does not affect this requirement.'

Is this just another case of CPA Australia saying:

1) We have messed up yet again
2) Not to worry, sure we cannot organise anything but we do know our bylaws - please thank us for keeping you informed.

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nakedadmin
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by nakedadmin » Tue Jul 25, 2017 7:56 pm

Yes it's an absolutely sub standard response. Again looking after themselves and not the members, trying to imply this does not matter so much rather than be open an honest with the facts.
The Naked Webmaster

aceone
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Location: Sorell, Tasmania

Re: Update on the operation of limited liability schemes for Public Practitioners

Post by aceone » Tue Jan 23, 2018 1:36 pm

Hi all
I've just finished attending CPA's webinar on Professional Standards Scheme update.
Crikey bob - what a schmoozle is playing out in front of us from the highest level of CPA. To be more precise - on one hand, CPA was promoting and encouraging members to take up financial planning accreditation after the end of the accountants exemption. I experienced the IPA making similar encouragements - can anyone advise whether CAANZ did the same?

On the other hand, the PSS will explicitly exclude any public accountant who provides financial planning services - EVEN through an unrelated corporate entity, even as an authorised representative. After this webinar, I'm starting to understand the same limitations apply to members of CA ANZ and IPA.

I am feeling as if all hope is to be abandoned in the sphere of public accounting.
Tracey Jones (right now, I'm too embarrassed to admit that I'm a fully paid up member), B.Mgt, M.Acc, DFP
CTC Taxation & Accounting Services Pty Ltd
Sorell Tas 7172

The Cranky CPA
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by The Cranky CPA » Tue Jan 23, 2018 1:59 pm

aceone wrote:
On the other hand, the PSS will explicitly exclude any public accountant who provides financial planning services - EVEN through an unrelated corporate entity, even as an authorised representative. After this webinar, I'm starting to understand the same limitations apply to members of CA ANZ and IPA.
The webinar was disappointing to say the least. Why were so few questions answered. Could CPA Australia not afford to have someone from management answering questions while the presentation was in progress. Other webinars seem to be able to have one person peresenting and one person answering questions at the same time. Poor presentation altogether, it did not really add anything to the information already available through the guidance note and certainly did not answer questions.

Who is CPA Australia representing? Certainly not its Public Practice members. CPA should actively lobby the PSS Council to change the PSS so it includes AFSL license holders. Is the disastrously under performing and loss making CPA Australia Advice at fault? I for one am interested to see if CAA, IPA, NTAA etc. will experience similar problems on renewal of their PSS.

The aim of the PSS is to limit liability and to keep Indemnity Insurance cost at a sustainable level. This change is forcing indemnity insurance cost up for Public Practitioners with an AFSL. Although CPA has promised to pay the excess indemnity insurance, ultimately we as members are paying for that. The same goes for the 2018 fees for the PSS the CPA promises to wave for those few Public Practitioners who are still covered under the scheme.

When your own accounting body does not support you where can you turn?

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nakedadmin
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by nakedadmin » Tue Jan 23, 2018 11:30 pm

This was all caused by CPAA Advice. The PSC decided that because the association competes with accountants in the area of financial advice the association cannot regulate the accountants it competes with for any services. Any services meaning tax, audit or whatever.

So if any of the following applies to you, you are completely not covered:
1. You have a full AFSL
2. You are a representative of a full AFSL.
3. You work one day a week on the reception desk of someone with 1. or 2. doing no financial advice.
4. You work one day a month as a cleaner for a related corporation to company with 1. or 2. above.

Refer to the guidance note appendix 1 para 4.

https://www.cpaaustralia.com.au/~/media ... .pdf?la=en

This is not a problem that CAANZ or IPA have as they do not compete with their members. I do not know if their schemes extend to cover financial advice work. I don't see why they would not as it's all within the definition of accounting services. As far as I know it was in the scheme before.

Food for thought: So if PSC said you can't regulate people that you compete with because of the conflict of interest, therefore we are not approving the scheme, how come ASIC still allows CPA to regulate accountants and how comfortable do you feel about them running the disciplinary process and your QA audit.
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Steve Hamilton
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by Steve Hamilton » Wed Jan 24, 2018 2:03 pm

nakedadmin wrote:
Tue Jan 23, 2018 11:30 pm
This was all caused by CPAA Advice. The PSC decided that because the association competes with accountants in the area of financial advice the association cannot regulate the accountants it competes with for any services. Any services meaning tax, audit or whatever.

So if any of the following applies to you, you are completely not covered:
1. You have a full AFSL
2. You are a representative of a full AFSL.
3. You work one day a week on the reception desk of someone with 1. or 2. doing no financial advice.
4. You work one day a month as a cleaner for a related corporation to company with 1. or 2. above.

Refer to the guidance note appendix 1 para 4.

https://www.cpaaustralia.com.au/~/media ... .pdf?la=en

This is not a problem that CAANZ or IPA have as they do not compete with their members. I do not know if their schemes extend to cover financial advice work. I don't see why they would not as it's all within the definition of accounting services. As far as I know it was in the scheme before.

Food for thought: So if PSC said you can't regulate people that you compete with because of the conflict of interest, therefore we are not approving the scheme, how come ASIC still allows CPA to regulate accountants and how comfortable do you feel about them running the disciplinary process and your QA audit.
To borrow and modify a Vulcan saying " The needs of the many outweigh the needs of the few... or the 27."

This seems to be another compelling reason, if they didn't have $7.4 million of them already, to CLOSE DOWN CPA ADVICE. Out of this whole mess public practitioners have suffered the most direct impacts. Maybe CPA Aust could come to some deal with CAANZ to transition CPA public practitioners to them and be done with it, public practitioners are just a pesky vocal minority, like me. Not sure how many are left anyway, I know a lot have transferred over to CAANZ if they can already.

JWheldon
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by JWheldon » Wed Jan 24, 2018 4:43 pm

The basic problem is the risk involved with financial planning operation, which the accounting industry couldn't secure with an appropriate insurance policy. Therefore they had to remove the financial planning side to get coverage. This exclusion from CPA Australia, does seem like a house insurance policy, which has many exclusions.

It does seem that for those who operate as public practitioners and also AFS limited licence holders or authorised representatives, that they are wasting their time paying the $50 in annual Professional Standards Scheme contributions, as it appears they are not covered.

It also appears, that those practitioners undertaking accounting and financials services will need to restructure their business, and ensure appropriate insurance coverage, or think twice.

Given that CPA Australia Advice was established for the small practitioners, it would appear that it will continue to lose large amounts of CPA Australia membership funds for many many years to come, just like AAT and other ventures. Don't see medium sized accounting/financial planning practices moving to CPA Australia Advice.

Careful thought needs to be taken with regards to those small public practitioners, that have entered the AFS limited licence/ authorised representative space.

"The CPA Australia Professional Standards scheme does not cover:
•services provided by members who do not hold a Public Practice Certificate (PPC) or Limited Public Practice Certificate (LPC)
•services provided by members who are authorised representatives of, or directly hold an (unlimited) Australian Financial Services Licence (AFSL)
•credit activity services provided by members
•Representatives of licensees under section 913B of the Corporations Act 2001 (Cth), not being a Limited Licence.

In practical terms, the Scheme will not apply to members who either themselves hold an unlimited Australian financial services licence (this was also the case with the previous Scheme) or are “Representatives” of a person or company which does." (from CPA Australia guidance not professional standards scheme)
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The Nude CPA
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by The Nude CPA » Wed Jan 24, 2018 8:23 pm

Question: does any kind of Professional Standards Scheme or similar exist for purely financial services/planning firms?

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nakedadmin
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Re: Update on the operation of limited liability schemes for Public Practitioners

Post by nakedadmin » Wed Jan 24, 2018 11:28 pm

JWheldon wrote:
Wed Jan 24, 2018 4:43 pm
The basic problem is the risk involved with financial planning operation, which the accounting industry couldn't secure with an appropriate insurance policy. Therefore they had to remove the financial planning side to get coverage. This exclusion from CPA Australia, does seem like a house insurance policy, which has many exclusions.
Sorry JWheldon that's wrong. It's the conflict of interest NOT the risk. The conflict of interest is created by CPAA Advice competing with members in the provision of a service, Financial Advice, which is within the definition of an accounting service (by laws).

Basically a justification of the PSC scheme is that consumers are protected by the regulations and QA processes put in place by the professional association. They are not approved where the association has improper regulation of members and QA. So CPAA could not satisfy the PSC that it has appropriate QA in place where that practitioner is involved in any way in a full AFSL.
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