Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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The Whitewash at CPA Australia is now complete.

This covers the board and management of CPA Australia
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Brett Stevenson
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The Whitewash at CPA Australia is now complete.

Post by Brett Stevenson » Mon Aug 06, 2018 3:52 pm

The whitewash is now complete at CPA Australia.
Unaccountability may well be the title of the book written in 2003 by Mike Brewster detailing the way the accounting profession ‘forfeited the public trust’ after the Enron and associated failings of the early 2000’s. I think such a title would be just as apropos for the failures of CPA Australia from 2007 to 2018 to describe how a professional accounting membership organisation lost its credibility. The final ‘nail in the coffin’ to confirm this unaccountability of the CPA Australia leadership responsible, was the review done by PwC into the fully owned subsidiary CPA Australia Advice.

Quite apart from the astronomical $600,000 fee paid to PwC to state the obvious, it is amazing the ‘agony’ has been prolonged for so long. With a guarantee of $20 million from CPA Australia to fund the subsidiary clearly all reason for cautious oversight and risk minimisation was removed. The opportunity for rent-seeking was amplified. And boy o boy did we CPA members pay for this.

Summary of CPA Australia Advice
Spreadsheet One.png (refer attached)
Just ponder these figures for a few moments

Think about the situation at the end of 2016 (this is just before we began exposing the issues at CPA Australia in February 2017).

With a revenue of just $47,000 after 19 months they had incurred expenses of $7,451,000, which may (I emphasise may) be okay for a startup, but when you consider that $1,580,000 of those expenses were paid to CPA Australia directors and senior management who were already being scandalously remunerated from Head Office, is it little wonder that I call this rent-seeking.

But of course the board of both CPA Australia and the subsidiary CPAA Advice (the same people pretty much) just pressed on regardless.

Ask yourself, just based on the financial data above whether this is the behaviour of the reasonable person in these positions. Well they soon backtracked (as well as being sacked or replaced en masse) in 2017 when details started to emerge. But I am getting ahead of myself.

The finances were not the only things that were of concern in relation to this subsidiary. Let’s briefly look at the concerns that have been conveniently ignored and/or downplayed especially in view of the $600,000 PwC review.

1. What A Bobbie Dazzler This Review Was Eh?
Insofar as the members are concerned it was a one and a half page whitewash (woops sorry, expensive review by a very expensive large accounting firm) which I could have been reduced to just six words.

1. Did CPAA Advice have a strategic rationale? - yes
2. Was CPAA Advice financially viable? - no
3. What are the exit options for CPAA Advice? - shut it down asap.

That’s $100,000 a word - a whole new dimension in benchmarking eh?

This was the ‘let’s pass the buck’ outcome of the $1 million Independent Review Panels Final Report (p.95) and the ‘let’s not make the decision ourselves’ approach of the $900,000 pa new CPA Australia board.

Rather they thought a gift of $600,000 to PwC to maintain the ‘largesse’ foundation upon which this subsidiary was built was more in keeping with the CPA Australia culture of “who gives a toss about the members money, we are in absolute control now so let’s just spend it as we see fit”.

You can almost hear the CPA Australia board saying to PwC “and of course it is imperative that the commercial-in-confidence confidentiality censorship is maintained to ensure our culture of minimum disclosure is maintained. So please no details for the members”.

Judge: “Just to clarify PwC, why didn’t you recommend any action be taken against the leaders responsible for this debacle?”

PwC: “That was because the new board at CPA Australia specifically limited our terms of reference to just these three questions, your honour?”

Judge: “And why do you think they would do that given they are the new board and had no real involvement in this up until October 2017?”

PwC: “You would have to ask them that your honour. But we understand that they were following the well known tradition developed over the last decade at CPA Australia that none of the leaders are ever to be held accountable for their actions or decisions?”

Judge: “What!!!”

PwC: “We appreciate it’s a new concept your honour but the CPA leadership want to be known for innovative thinking and leading the big life (so to speak?”

Judge: (under her breath) “I can see why they get fellow accountants to do their ‘independent’ reviews.”

2. The Remuneration ‘Rent-Seeking’ By The Already Scandalously Remunerated Directors And Senior Management Of CPA Australia.

So scandalous in fact that when the members found out (which was only done after we forced them to disclose it by requesting a s.202B statement) the CEO Alex Malley was sacked and the two COO’s (Adam Awty and Jeff Hughes) as well as the entire board were replaced.

There were at least three major issues relating to the remuneration that need mentioning here as the Independent Review Panel Report, the PwC review and the new CPA Australia board are reluctant to talk about them.

The Background
Firstly let me detail what these people were paid so we keep this objective using the 2016 year as representative because that is the only year where they provided full disclosure
Directors Fees and Management Fees - refer attached spreadsheets summary

revised spreadsheet on dir fees.png
Management Reumneration.png
Judge: (chatting with her secretary before entering the court) “Can you believe these numbers? I think we’d best make sure we have plenty of vacant cells down below if these numbers are any indication. Can you check with the clerk of the court please?”

Issue 1. Directors Remuneration Over The Constitutional Limits.
The constitution of CPA Australia sets maximum levels of remuneration for directors. These four directors managed to extract $204,000 from CPA Australia Advice over those limits (see above).

How is this explained?

Well the Independent Review Panel in its Preliminary Report just stated that the Boards of CPA Australia and CPA Australia Advice did not regard the constitutional cap as applying to the subsidiary and that “it is not unusual for Directors to be paid additional fees for sitting on Boards of subsidiaries” (p.47). Surprise surprise eh. What did the Ind Review Panel expect them to say?

The Final Report only added that the CPA Australia General Counsel advised that the constitution gave no explicit guidance on this matter (p.50). Again surprise surprise. What would you expect the in-house and well remunerated General Counsel to say eh? Clearly the in-house legal advice is what the IRPanel followed with no question.

The IRP’s conclusion - change the constitution to specify that the constitutional limits apply to the subsidiary as well.

They expressed this accordingly “Research and discussion with key stakeholders has strengthened the Review Panel’s view that this is an appropriate course of action.”(p.58).

In other words the best spin you could put on the Independent Review Panels recommendation and findings is that the board should have kept within the constitutional limits with subsidiaries (abide by the spirit not just the letter of the law sort of thing) and the more realistic view is that the boards of both used a questionable interpretation of the constitution to pay themselves well above the limits. Clearly none of the directors considered that their approach was akin to Enronising compliance with the law such that they could have created as many subsidiaries as they wanted and thus being outside the restrictions of the constitution of CPA Australia directors remuneration would have had no limits.

I leave readers to think about this and ask themselves would they have approved this, and more importantly why or why not?

Keep in mind that the members had no idea when this decision was made of how much the directors were receiving from CPA Australia.

But the directors sure did. I surmise that had the directors known their directors remuneration would be fully disclosed they would have made a different decision because the scandalous nature of this decision would have been obvious to all. That in itself gives us a clue as to the mindset and standards of the CPA leadership - ‘go for it unless risk being caught’.

Judge: “Did any of you consider whether the directors remuneration limits in the CPA constitution should apply to this fully owned subsidiary?”

CPA Australia: “We did after the event your honour, but at the time we were conscious that the members had no idea what we were being paid so what difference did a few hundred thousand extra make anyway?”

Judge: “But surely you sought some legal opinion, after all you are the board?”

CPA Australia: “Well, your honour, we employed our own In-House General Counsel, so we just presumed that anything that came before the board would have been okayed by him to have even made it this far?”

Judge: “But are you not aware that the an ‘In- House General Counsel’ has ethical obligations to do the right thing by the court irrespective of the company’s views?”

CPA Australia: “Exactly your honour, that’s exactly what we thought also.”

Judge: “Can I suggest that you make some time to have a read of the judgement in the Centro case.”

CPA Australia: “Of course your honour, we vaguely remember some mention of that in the AICD Directors course we all completed (successfully we might add), but it was just a passing reference as they were more concerned with emphasising that we needed to get gender balance and ensure inclusivist language permeated all our communications.”

Judge: “yes, yes, I know all that but in this court we are concerned with whether directors are doing the fundamentals right, and let me give you a tip from my experience personally and from cases in this court that gender has got absolutely nothing to do with competence as a director. The fact that I, for example, have two breasts and a vagina while some others might only have a penis, is about as relevant on this matter as to whether you are blonde or brunette, or for that matter whether you are a lawyer or an accountants or a nurse.”

I suggest next time you focus on the fundamentals and then some of the poor decision-making which has been evident at CPA Australia might not occur.”

CPA Australia: “But your honour Ruth Medd from Women on Boards said…..”

Judge: “Yes, yes, I know, I have come across that before in this court. All I can do is assure you that competence to be a director is gender neutral. I certainly did not get to this position because I was a female but because I was a good lawyer.”

CPA Australia: (snickering to themselves) “Thank you your honour for such wise counsel.”

Issue 2. The Payment Of These Outlandish Remunerations To The Board And Senior Management When It Was Patently Obvious That The Subsidiary Was Bleeding Enormous Amounts Of Money With Very Little Revenue.

Have a quick glance again at the charts above to see how much these people were paid - in 2015 on a revenue of $1,000 they paid themselves $580,000 which was 34% of the total expenditure of $1,712,000. In 2016 it was not much better - on a revenue of $46,000 they paid themselves $1 million out of a total expenditure of $5.7 million, almost 20% of expenditure.

It’s hard to comprehend the gravity of these payments without words like avarice and rent-seeking coming to mind. How could any already generously remunerated leader possibly rationalise these payments.

In relation to the directors remuneration the Independent Review Panel Report in its ‘lets keep it positive and make sure no-one is held accountable’ mode just spoke in global terms of their being a strategic rationale for the subsidiary, that the budget could not be seen for commercial in-confidence’ reasons, and that the losses were less than what was budgeted. You can fill in the missing items and logic in that (and please no swearing).

Did the budget have these massive remuneration payments?

But no, they would not say. What is so sensitive and commercial-in-confidence about that other than to avoid stating the obvious that these leaders saw this as a great opportunity to reward themselves handsomely from a gilt edged guarantee that CPA Australia would pick up the tab. Ditto for the PwC review.

In relation to the remuneration paid to the three senior CPA Australia management (Malley, Awty, Hughes) the IRPanel initially said it was not unusual (Preliminary Report) but after some sobering feedback from members changed it to a “the executives of CPA Australia should not be paid additional remuneration for management responsibilities with subsidiaries”.

Just beautiful - wrong but no accountability. The IRPanel were happy to tell us when we couldn’t take legal action (such as on Alex Malleys termination pay) but not when we possibly could. Just too beautiful for words.

So one can see that Mr Malley managed to top up his already scandalous salary with another $400,000 over an 18 month period, while Messrs Awty and Hughes managed to squeeze an extra $300,000 each over the same period.

Clearly this issue has significant implications in terms of directors (and officers) duties. But we need to remember this is a professional whitewash so any thing that could give any credence to legal action against those responsible needs to be ‘stricken from the record’. Hence the IRPanel and PwC, and the new boards abdication in terms of looking for accountability.

Judge: “Just remind me, why did you pay these extra amounts to the already remunerated directors and management when the losses were both phenomenal and actual?

CPA Australia: “We plead the fifth on that one your honour.”

Judge: “But why, surely you must have some reason?”

CPA Australia: “We apologise your honour but we plead the fifth again.”

Judge: “Mmmm……. This does not look good.”

Issue 3. The Central Role Of The CEO Alex Malley In Selecting The Directors And Senior Management For The Subsidiary Along With Their Remuneration Levels.

What did the Independent Review Panel say about this?

Well go to page 47 of the IRPPreliminary Report and this is what they said
“CPA Advice Board appointment and remuneration did not follow the same procedure as CPA Australia. Candidates and remuneration were recommended by the former CEO in a meeting in February 2015. The former CEO “outlined the recommended candidates for the appointment to the Board”.77 The CPA Australia Board, excluding those Directors who were to sit on the CPA Advice Board, then approved the appointment of five existing directors and remuneration of:

$100k per annum for Chair

$70k per annum for Directors.

Some members raised queries regarding the appointment of directors, especially the lack of clarity around the candidates for selection”.
Think about that for a bit.

A fully owned subsidiary given a $20 million guarantee of funding, with no control mechanisms on remuneration from the CPA Australia constitution (because they and the in-house legal counsel said so. Really!) so the CEO of CPA Australia (Alex Malley) recommends who should be on the leadership team and how much they should be paid. And what was the concern of the CPA Australia board - the selection of the people to share in this bountiful largesse. Wow, and CPA Australia want us to think they take corporate governance seriously.

No questions about the amounts paid for a startup presumably budgeted to lose millions, no questions about their already high remunerations, no red flags waving with the selection of people (five of whom had been there from the beginning of the Malley era - Malley, Hughes, Awty, Wade, Petty, and one - Carlin, already being squeezed for time as Deputy Vice Chancellor of Sydney University).

Where does one begin to address the major shortcomings here.

Just look at it from the perspective of experience and expertise - public practitioners and financial advice which would be foundational for this subsidiary. So what did they do? They selected two academics (Petty and Carlin) as board members, and three senior managers (Malley, Awty and Hughes) who must have been hiding some hidden talents in their CV’s to be selected. But no red flags to anyone, and the Independent Review Panel Report ($1,000,000), the PWC review ($600,000), and the new board ($900,000 pa) with a total of $2.5 million in ‘expertise’ just conveniently turned a ‘blind eye’ to it all and just echoed their now famous operational mantra of ‘no accountability, no accountability, no accountability’.

Judge: “Just to clarify, the board in February 2015 who approved these matters were those remaining (8) after one third of them (4) were appointed to the subsidiary?

CPA Australia: “yes, your honour that is correct.”

Judge: “And the CEO Alex Malley who made the recommendations which the board accepted always attended every board meeting (apart from the one where they approved his contract to give him a three year term)?”

CPA Australia: “Yes, your honour, that is correct. We made the exception with the contract because Alex, I mean our CEO Mr Malley and our General Counsel, thought that it would make the contract more watertight if ever it was disputed given that it was way over the top in terms of the benefits.”

Judge: “Yes, yes, we all know about that one. I am surprised that the new board have not taken action over that one because from where I sit that is……. I had best not continue as that would be ex parte.. Let us continue.”

CPA Australia:
“So, the CPA Australia board who approved this in February 2015 were Jim Dickson, Kerry Ryan, Richard Alston, Penny Egan, Peter Dowling, Tim Ebbeck, Peter Spong and Deborah Ong. And the four who also served on the subsidiary board were Graeme Wade, Richard Petty, Tyrone Carlin and Michelle Dolin.”

Judge: ‘Thank you. Just to clarify - this is the same Penny Egan who is still a director on the APESB which sets the ethical standards for the accounting profession, and who gave a ringing endorsement of both the leadership and remuneration of Alex Malley in a national newspaper just days before he was sacked?”

CPA Australia: “Yes, your honour that is the same person.”

Judge: “Yes, I am starting to get a good feel for the modus operandi of the governance at CPA Australia. Also can you confirm that this is the same Tyrone Carlin who had a full time job as Deputy Vice-Chancellor of Sydney University and Richard Petty who had a leadership position at the Macquarie University Graduate School of Management? In other words both were academics with not a lot of experience in public practice nor financial planning advice?

CPA Australia: ‘ Yes, your honour, we would not express it like that but that is correct.”

Judge: “Just in finishing on this matter, can you tell me why you were more concerned with who was selected to be on the subsidiary board than with the process of how the remuneration and appointments were being handled. In other words none of the checks used at CPA Australia (such as they were) were utilised?”

CPA Australia: “No, your honour, our primary concern was to ensure that the remuneration level was adequate to attract the best candidates at both board and management level?”

Judge: “You have to be kidding?”

CPA Australia: “Yes, we are pulling your leg your honour. We just cannot remember what our primary concern was as we clearly missed the obvious eh?”

3. The Loss Of Public Liability Insurance.

What can I say to add to this debacle.

Oh well, that’s just a business risk worth taking eh?

Could negatively impact all public practitioners but hey, who cares?

4. The Use Of Consolidation Standards To Hide The True Situation From The Members.


Of course it’s okay to contra the asset in CPA Australia’s books (of the loan to CPA Australia Advice) with the liability of the same amount to CPA Australia Advice as it’s a fully owned subsidiary because that’s what the consolidation standards allow. And voila - nothing in the CPA Australia annual report. It’s one of the wonders of modern accounting standards. Misinform and mislead but hey who cares so long as we abide by the standards.

Judge: “Did you consider this was misleading by effectively hiding important information from the membership?”

CPA Australia: “Your honour we abide by the rules, we stick to the standards. How possibly can that be regarded as wrong? You have to remember we are the standard setters and standard bearers. There is no way we would ever do anything like mislead the membership by withholding information.”

Judge: “But surely your standards have an overriding qualification that if sticking to the standards would mislead then you are able to override the standards along with an appropriate explanation?”

CPA Australia: Silence. “We plead the 5th on that one your honour”.

I think we all need to be aware of the writings of Frank Clarke, Graeme Dean and Kyle Oliver, especially in their book Corporate Collapse: Accounting, Regulatory and Ethical Failure (2003, an oldie but a goodie) which provides more detailed discussion of the failings of consolidation standards and their abuse in corporate Australia. I’m sure they never imagined that one of the main accounting bodies would be guilty of that very thing. But given what has been exposed at CPA Australia and the quality of our leadership it possibly comes as no surprise to most of us now.

5. The Unwillingness Of The CPA Leadership To Fully Disclose What Was Happening At CPA Australia Advice.

Their credo was “a thousand horses in not going to drag that information out of us”. If this means lodging the 2016 annual return late (16th May 2017) then so be it. Especially if it means it is after the AGM in Singapore (27th April 2017) all the better. Don’t want any pesky questions from the members. And of course lodging it without the financial report was just a stroke of brilliance.

And of course the Independent Review Panel in its beautiful ‘lets hold no-one accountable and keep it very soft mode said of this (p.93 Final Report)
“CPA Australia Advice filed and lodged a Profit and Loss Statement, Balance Sheet and Audit Report with ASIC before the required deadline. The Review Panel has been informed by senior executives of CPA Australia that CPA Australia Advice subsequently became aware that a full copy of the financial report was required to be lodged with ASIC

This was 14 days after all ASIC Forms were required to be filed. The Review Panel has been informed that this oversight was due to it being the first time that these ASIC Forms were submitted pursuant to CPA Australia Advice’s AFSL. While the Review Panel accepts this was an oversight, it does not reflect well on CPA Australia Advice and CPA Australia, both of which have an obligation to uphold the high standards of the accounting profession”.
Just look at the words used “informed by senior executives” (just to show how co-operative they were, not the sort of people who would do this intentionally) and the “oversight was due to the first time…” blah blah blah, and on it goes.

I would like to think that our police forces and regulators are a lot less gullible than the Ian McPhee led Independent Review Panel.

“I didn’t pay the fine on time your honour because my car had four flat tyres in an hour and all the traffic lights were out in the city and the ATM ran out of money”.

“But your honour we may be professional accountants but really for you to expect us to know that the financial report was part of the annual return is quite unreasonable. And just because it was lodged after the AGM in Singapore is pure coincidence”.

6. The ‘Fairyland’ Budget To Support The Decision To Proceed And Continue For Three Years.

Just try these few numbers that I have been able to ascertain, and ask yourself how realistic was this?

Competitors charges p.a. $3,300

CPA Australia Advice charges p.a. $8,500



Budgeted Advisers 2017 - 250

Actual Advisers 2017 - 37



Budgeted Advisers 2019 - 1,370

Actual Advisers 2019 - there are pigs flying out there



Financial Summary after 30 months (to 31st December 2017)

Loan Provided $12.4 million

Revenue $264,000

Expenditure $11.7 million (incl. $1.74 million of rent-seeking by leadership)

Losses $11.4 million



Decision Summary

1. Leadership of CPA Australia Advice - let’s press on

2. Leadership of CPA Australia group one (up to 2017) - let’s press on

3. Ian McPhee led Independent Review Panel (late 2017) - let’s have another review

4. Leadership of CPA Australia group two (2018) - let’s have another review

5. PwC Review (2018) - ‘bedad, it’s cruke, me lad’ (Said Hanrahan)

6. Leadership of CPA Australia group two (2018) - let’s shut it down

I call that a litany of lethargy and wasted money but that’s governance CPA Style.

Judge: “How could you as a board possibly justify going ahead with these scant budgeted figures?”

CPA Australia: “Your honour we cannot answer that question because these figures are confidential, commercial-in-confidence and cannot be disclosed.”

Judge: “But surely PwC saw these, as presumably did the Ian McPhee led Independent Review Panel?”

CPA Australia: “They certainly did your honour and the Ian McPhee led Independent Review just recommended another review (their recommendation was written by a staffer called Humphrey Appleby and it sounded ever so commendable to us), and the PwC review recommended that we shut it down immediately.

Judge: “But surely this was obvious three years ago?”

CPA Australia:
“Well, your honour remember they were paid $600,000 to consider this, so….”

Judge: “But you board members alone were paid over $728,000, and with the management it totalled over $1.7 million. What were you doing?”

CPA Australia: “We plead the 5th your honour.”

7. The Terms Of Reference Ensured A Professional Whitewash.

The terms of reference were specifically limited to three things - was there a strategic rationale? (yes), was it financially viable? (no), what are the exit options? (close it down immediately).

Nothing about who was responsible, was it reasonable, was the budget fairyland or realistic, any further action against the leadership etc.

So, just as the Ian McPhee led Independent Review Panel’s terms specified only recommendations for improvement to ensure no accountability, so with this review into the subsidiary CPA Australia Advice.

The result - NO ACCOUNTABILITY

Judge: “But surely accountability is a critical necessity to have credibility and ethical integrity?”

CPA Australia:
“What do you mean accountability and integrity, they are new concepts to us. Where did you get that from your honour?”

Judge: “Well look at the word integrity on your logo, and I referred to the APESB, your professional standards.”

CPA Australia: “But your honour we have never been constrained by such factors in the last decade so why now?”

Judge: “What!!!!”

CPA Australia: “Woops. That was an unusual slip of honesty your honour. Can we rephrase that and say we honestly believed we were acting in the best interest of the profession, the members and the public interest.”

Judge: (under his breath) “What a load of crap”.

(Aloud) “Well thank you CPA Australia leadership this has been a very informative session. You have been able to plumb the depths with your ethical and professional standards. Not sure if you should be congratulated or condemned for that but there you go - it is what it is eh?”

“Just A Few Questions Before You All Go To Help Me Get Some Perspective Before Making My Judgement?”

CPA Australia
: “No problem your honour, always happy to help”.

Judge: “I understand that one of the main weaknesses with your corporate governance is that the members have not been able to vote directly for the board. I presume that has now been fixed?”

CPA Australia: “Well your honour we have improved the ….”

Judge: “Please a yes or no surely will suffice. It’s a pretty simple question.”

CPA Australia: “No, your honour the members still cannot not directly vote for the board but…”

Judge: ‘Thankyou. Crikey you certainly know how to play with a stacked hand.”

“I also understand that the members were concerned with the high remuneration for the board of over $1 million p.a. Which I can imagine was understandable given that they were voluntary prior to the Malley era. So can I presume that the boards remuneration is nowhere near $1 million p.a. now?”

CPA Australia
: “Well your honour…”

Judge: “Please, surely you can tell me how much.”

CPA Australia: “Actually it is only $900,000 p.a. your honour with opportunity to increase it to $975,000. So it is well under $1 million.”

Judge: “Only $900,000. Mmm sounds pretty close to $1 million to me?”

“I can see why you have accountants do your independent reviews because if a lawyer did them, you might be in trouble.”

CPA Australia: “Thank you your honour. Can we offer you this book called “The Naked CEO” as a gift of our appreciation?”

Judge: “Thanks but no thanks. I had a glance at it recently at a Recycling Station at the Rubbish Dump, and there must have been over a thousand of them there. That was enough to tell me of its quality. And to be honest, the leadership skills you have shown here today hardly is conducive to me listening to any advice or recommendations from you”.

On And On It Could Go.

Note 1: Just think about the fact that in the financial reports for CPA Australia Advice lodged with ASIC for 2016 and 2017 there is no Note 3, which is referred to on the P and L. It is pathetic what they will get up to. I’m sure just another oversight.

Note 2: Also think about the fact that it was not until April 2017 (two years after this subsidiary started June 2015) that details were given of the finances with the lodging (late at that) of the 2016 annual report.

And they talk about transparency and openness.

Note 3: Note in particular that it was not until April 2017 that we knew that CPA Australia had provided a $20 million guarantee loan to finance the subsidiary.

To my mind CPA Australia Advice was a ‘secretive’ little subsidiary that they conveniently treated as a source of increasing their own remuneration outside the confines of the CPA Australia constitution. And what did everyone say - the boards of both bodies, the Ian McPhee led Independent Review Panel, the PwC review, the new board of CPA Australia?

Absolutely nothing that would make these leaders accountable for their decisions and behaviour.

And CPA Australia carries on as if all is well - we have a new CEO, we have divisions which are democratically elected but have no power and ultimately acquiesce to the all powerful (and unchallenged) board of CPA Australia who can pretty much do what they want with a disinterested and apathetic membership.

That is governance CPA style, and I wouldn't recommend it to anyone.

But never fear members, at least the board has the vocal support of Ruth Medd and her Women on Boards organisation (refer the AGM in May 2018 for her ringing endorsement), and the accounting faculties at the universities just love providing uncritical support to CPA Australia because the dollars flow much faster that way (just refer to the LinkedIn posts commending the CPA management postings by academics).

“But your honour we just teach accounting. The ethical and other issues at the professional membership organisations we promote are of no concern to us other than as a tool to maximise our student numbers. After all we are academics and you could hardly expect us to get too involved in the nitty gritty of such sordid stuff. We are all into numbers (especially of students and fee revenue) and ethics is more of a side issue. If promoting CPA Australia brings in the students then who are we to criticise it when it does the wrong things eh?”

It has only taken a few short years for a great organisation to lose its credibility. Not it’s revenue earning ability, nor it’s membership numbers, nor it’s connections with the IFAC and APESB etc etc.

The Naked CEO and In Conversation cohort may no longer play there but certainly their hubris and delusions have not disappeared from the playground.

A Question For All Members To Consider.
Have you heard one word of criticism or objection from any of the divisions on this PwC Review of CPA Australia Advice?

No either have I and nor will you.

There is a cameo in one of the mythical governance system at CPA Australia.

Here’s Another One Just To Confirm The Myth.
Have any of the divisions asked for the amount that CPA Australia gave to South Sydney Rugby League Club, or of the membership breakdown between the Australian states?

I guess you could summarise this post-Malley period as

The Age Of The All Powerful Board, The Acquiescent Divisions, And The Disinterested Membership.

Oh and just to remind all members our new Chairman Peter Wilson is receiving his handsome $220,000 fee without a hint of regret. My guess is that he is planning for a two possibly three year stint because, as he found at AHRI, a suitable replacement could not be found. How gracious and noble of him.

I just loved the way he could say at the AGM that he along with his fellow CPA Australia directors (especially Merran Kelsall, Ric DeSanti, Robyn Erskine etc) were disappointed with what happened at CPA Australia (looking from the outside) when they were more on the inside than the vast majority of the members. Peter Wilson’s AHRI had a partnership with CPA Australia, Ric DeSanti, Merran Kelsall, Robyn Erskine were long serving members on CPA Australia committees and divisions. Perhaps you could call it a case of ‘turning a convenient blind eye while on the inside to enjoy the benefits of the inside but saying you were on the outside when it’s convenient to provide even more benefits’. I’m sure there is a word or phrase that encapsulates such a condition.

Oh, just as a little final comment that perhaps some other members might like to follow up on for obvious reasons (of course the divisions should be asking a lot of these questions but they are too busy implementing the Ian McPhee led Independent Review Panels recommendations to ever consider that perhaps they might like to consider what is in the best interests of the members rather than ensuring unaccountability is locked in to the CPA Australia mindset):

1. Did they call for tenders for the Review of CPA Australia Advice, which was awarded to PwC?

2. Why doesn't AHRI (which is the Peter Wilson led organisation that had a partnership with CPA Australia, and I understand is a charity) will not make its financial reports accessible to the public on its website? Surely the last thing CPAAustralia want is a Chair who adopts the same minimum disclosure approach that we have seen abused at CPA Australia. Maybe some of the board members of CPA Australia might like to ask the question (or dare I imagine one of the divisions?) It is not a good look.

Cheers

Brett
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