‘Conflict of interest’: accountant caught in crossfire to pay $4k in costs, undergo ethics training

In 2019, the complainant entered into a JVA with another entity for the construction of dwellings, to be managed by a newly incorporated company, Special Purpose Vehicle (SPV). The JVA provided that the parties have access to the SPV bank account and accounting system.

Upon its registration, the director of the other joint venture party was appointed the sole director of the SPV, with the parties to the JVA each holding one share.

In 2022, the SPV settled the acquisition of a property, with the complainant contributing approximately $250,000 through the SPV, and the balance secured by a mortgage.

The member was engaged by both JVA directors and SPV. He also later acted for the complainant personally. 

After the property acquisition, the complainant sought access to the bank statements and financial records of the SPV, which the director said could be gained by going through the member.

Following instructions from the director, the member received the file for the documents and was advised that the statements and financial records were unavailable.

In late 2022, the director and the complainant entered a dispute, necessitating the refinancing of the property. Shortly after, the director instructed the member not to provide the complainant with any further information regarding the SPV’s bank statements and financial records.

The member said that this instruction was provided verbally and that the change in instructions was due to the escalation of the dispute between the parties.

The member complied with this revocation of access on the belief that the complainant was only a shareholder of the SPV, with the director of the other entity serving as its sole director, despite the complainant having a contractual right to access these documents under the JVA.

In its 29 April 2026 decision, the PCC noted that it was not clear whether the member was aware of this contractual right. 

It found the member was aware of the dispute between the parties and had admitted to receiving the JVA; he noted that he may not have read it, and was not up to date with all parts of it.

The complainant disengaged the member shortly after having documents withheld.

The accountant attempted to resolve the dispute and sought a refinance of the property using his finance broking experience, which would earn him a commission, despite not disclosing this to the complainant. 

The PCC said that the member actively sought refinancing for the property, corresponded with the parties regarding the provision of bank statements and financial records, and his role as a financial broker added to various conflicts, which were worsened by his failure to disclose to the complainant the commission he would earn.

This conflict of interest, the PCC said, posed a threat to compliance with the fundamental principles that were unacceptable. The PCC said that the member’s only option was to stop acting for the parties, or have his professional or business judgment compromised.

The director also eventually disengaged the member, along with his and his entity’s accountants, and the complainant continued to seek access to the bank statements and financial records.

“In the PCC’s view, the Member had a number of overlapping roles and relationships which created threats to compliance with one or more of the fundamental principles,” the PCC said.

“These roles and relationships included the Member’s roles in acting for the director (personally), the SPV and the other joint venture party initially and later the Complainant as well. The Member denies acting for the joint venture, as opposed to the SPV,” the PCC found.

In their submission, the complainant alleged that the member breached the fundamental principles of integrity, objectivity, and professional behaviour, which the member denied. The member said that he tried to assist the parties to resolve their issues through his engagement, and that he applied the conceptual framework and continually assessed his position; however, the PCC found that the application of the framework was not clear from the available evidence.

“...he still did not consider that there was any conflict of interest as he says that, even though he was still formally engaged by the SPV, he was not doing any accounting or taxation work for it by this time,” the PCC found. 

However, the PCC said that the member’s issues were not rectified simply by ceasing to undertake accounting work for the SPV from late 2022, or for the complainant from mid 2023, given the other roles and relationships he held, and the complainant’s interest in the SPV and the joint venture.

“The Member says that he did not consider there was any conflict of interest at the time he commenced acting for the director, the other joint venture party and the SPV and later the Complainant, as everyone was in harmony,” the committee found.

“... conflicts of interest can arise even when parties are apparently in harmony and in such circumstances, there is a need to apply safeguards to take into account the possibility of a subsequent dispute,” the PCC said.

Thus, the committee found that the member failed to comply with the “fundamental principle of objectivity”, and in its view, the failure was “extremely serious”. However, the PCC noted no evidence that the member acted in bad faith and decided to enter into a consent order agreement with the member, which was placed on his record, rather than refer the complaint to the disciplinary tribunal.

Under this agreement, the member is required to undertake mandatory engagement with CA ANZ short courses at his own expense, the submission of a quality review to the body focusing on engagement terms and procedures for dealing with conflicts of interest, the payment of $4,730 to the body for the costs of investigation and dealing with the complaint, and the notification of the decision to the ASIC and the TPB.