Professionals with a CPA Public Practice Certificate across Australia have now lost a crucial legal protection and should act to ensure appropriate protections are in place.
CPAs lose liability cover Australia-wide
From October 7, the current CPA Australia Professional Standards Scheme, which operates in all mainland jurisdictions, will expire.
From that point onwards, all CPA Australia Public Practice Certificate members will lose the protection of that Professional Standards Scheme.
The scheme covers 6,963 members, providing an additional layer of security for a firm’s clients, with limitation of liability for the provision of certain services.
The PSC had already confirmed in June that CPA members in Victoria had lost the protection of the scheme.
It will take a minimum six months from publication approval of a scheme to progress through statutory approvals and receive final establishment.
“The Professional Standards Councils are concerned for the CPA Australia public practitioner members and their clients. They have directed the Professional Standards Authority to continue to work with CPA Australia to minimise the effect and the duration of the lapse in coverage,” the PSC said in a statement released this morning.
“We understand CPA Australia is working through the resolution of a range of matters with their members and remain hopeful that a new professional standards scheme can be established in a timely fashion,” it said.
CPA Australia’s response to this issue so far has been that their application is active.
The association has also issued advice to members about how to prepare for the lapse in coverage, which include assessing professional indemnity insurance policies to ensure adequate protection.
The PSC is also advising that members notify their insurers of changed circumstances regarding limitation of liability, and noted members may be “potentially be forced to purchase new insurance policies.”
From October 8, CPA Australia public practitioner members will need to cease to use any letterhead or business documents that carry the statutory disclosure statement. It is a potential breach of Australian Consumer Law to show the statement to clients when not covered by the scheme.
Central to the problems with the application are conflicts of interest arising from the establishment and structure of CPA Australia Advice.
The significant corporate governance and leadership issues that have since surfaced are also informing this process, Dr Deen Sanders, chief executive at the PSC, told Accountants Daily late last month.