Accountants need not join financial planners education arms race, Treasury told

By September 20, 2019 Homepage, In the Media, Industry

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Written by Jotham Lian on 17 September 2019

The accounting profession does not have to follow in the footsteps of the financial services industry and raise minimum education requirements, Treasury has been told.

In response to Treasury’s discussion paper on its review of the Tax Practitioners Board, the three accounting professional bodies have shot down suggestions that accountants should follow in the footsteps of financial planners and adopt a baseline education requirement.

Under the new Financial Adviser Standards and Ethics Authority (FASEA), new and existing financial advisers are required to have an approved bachelor’s degree qualification, complete a financial adviser exam and undertake 40 hours of continuing professional development.

The discussion paper had asked if the primary educational qualification for a tax agent should be increased to a degree-level qualification, while BAS agents should be required to have a diploma-level qualification.

“It does not necessarily follow that if financial advisers have to do a degree minimum to register with the regulator, then all tax practitioners should have to do a degree minimum to register with the TPB, and that no exceptions or flexibility should apply, such as the existing ‘professional membership’ pathway,” said Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia in their joint submission.

Likewise, the Institute of Public Accountants said simply following suit was not necessary, noting that tax agents were usually part of professional associations and bound by stringent standards.

“In our view, to ensure that consumers of financial advice are protected in an industry where poor advice was rife, it was necessary to impose a baseline educational requirement where there was previously none before the establishment of FASEA,” the IPA said in its submission.

“The same cannot be said for the tax agent profession. Those tax agents who do not hold a tertiary qualification would typically be a member of a recognised tax association under the 206 pathway.

“These tax agents are bound by professional and ethical standards, continuous professional development requirements and are subject to disciplinary action if they breach the requirements of these associations, which would ensure that standards are maintained, and consumers of tax services continue to be protected.”

If higher education is mandated

However, if the baseline education requirement was ultimately raised, all three professional associations believe existing accountants should be grandfathered from the changes.

“It is important that any changes to educational and experience requirements have long transition periods for those currently undertaking impacted courses and grandfathering to avoid the need for current tax practitioners having to undertake further study to meet a new education standard,” CA ANZ and CPA said.

The IPA added: “To impose a tertiary qualification as the primary qualification without any grandfathering would jeopardise the practices of these older agents who do not hold a tertiary qualification and will inevitably force them into retirement. This form of disruption cannot be afforded by the profession.

“Any changes should only apply prospectively to new registrants.”

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