Ethics and Governance for Certified Practicing Accountants

Question: Discuss about theEthics and Governance for Certified Practicing Accountants. Answer: Introduction CPA or Certified Practicing Accountants in Australia has a vast number of members and have been in the list of the largest accounting bodies globally. The committee was first introduced in the Asian market with the aim to develop and reorganize both the process as well as the profession of accounting. The parent bodies of the CPA are the Commonwealth institute and the Federal institute which were merged in order to create the Australian Society of Accountants. The body aims to provide financing, accounting and business information services to a large number of clients from all over the globe (OBrien, 2013). This study aims to investigate into the current issues faced by the committee as a whole. For an instance one of the major issues faced by the body in the recent times is regarding disclosing the pay or remuneration received by the CEO along with the entire management of the CPA which was done after excessive lobbying by the employees of the organization.This is definitely an issue of concern because if the higher authority officials of such a large organization can commit infringement in such a way then the employees will obviously feel demoralized to work in such conditions (Hoyle, 2016). CPA and its issues Certified Practicing Accountants Ltd. has been working since the last century and is an unlisted company which is limited by guarantee. Issues in relation to the corporate governance of the entity were first published in the Rear Window Section of the Australian Financial Review. After Australian financial review publishing it, the news became a buzz in the market. There were a number of issues which ruined the goodwill, CPA had earned in the recent past both in the business world and among its employees (Wallace, 2014). The first issue was that the Chief Executive Officer (CEO) of CPA didexcessive marketing in order to establish his own brand value. In better terms the CEO of CPA with support from the Board did spend over 50 million on promoting himself as the CEO of CPA. Actually he wanted to publish his own book The Naked CEO and also sponsor the television programme, In Conversation with Alex Malley. Moreover these advertisements served no purpose of CPA and its members. Furthermore what was very shocking is that the 50 million that was funded for doing all these was extracted by the CEO, with permission from the Board, from the collection of members subscriptions (Enright Petty, 2016). Many officials are of the opinion that the process of electing the chief executive officer of CPA is not transparent and also that the entire process should be executed via the method of voting (Denning, Pleuvry Cole, 2013). The second issue is that the members of CPA who do not hold such a high level position that is ordinary members have no right to exercise their judgment or opinion in the decision making process of the entity. Even the members are not allowed to elect the Board members. For this purpose an internal subcommittee had been created, the members of which were again not elected by the ordinary members (Reynolds, Carroll Welch, 2016). One of the major issues as discussed earlier is the issue related to increasing the remuneration of the CEO as well as the board members or directors of CPA. Actually the day when the acting CEO of CPA, Alex Malley had joined the company as the CEO, there had been several reforms on the part of the government, within which the increase in salary by 10% for the CEO had been scheduled. Further investigations led to a very significant piece of information that though the total revenue earned by the firm is 170 million out of which CPA had kept aside $1.7 million only for the remuneration of the directors. This was really unfair for the ordinary members of the organization as they were being deprived from their share of welfare unethically. Mr. Malley before being the CEO of CPA had been in Macquarie University as a part of the faculty and had been removed on grounds of serious misconduct. In fact the more shocking news is that in spite of the knowledge that Malley had such a controversi al professional background, he was directly elected the CEO of the entity without any further thought. This clearly indicates that the entire constitution of the firm is corrupted. The directors or board members, the subcommittee and the elected CEO has been planning certain fraudulent activities prior to committing such nuisance. Thus it is clear from the happening that not only the CEO, Alex Malley but also the directors are involved in the act. After the occurrence of so many issues in the CPA, the ordinary members of the entity very rightly protested for their exclusive rights in the company (O'Brien et al., 2015). They managed to do this by lobbying. This finally resulted in public disclosure of the remuneration obtained by the CEO and other directors. This action resulted in upheaval among the public as wel as the embers of the institution (Nasrudin, 2015). The primary question that rose from this situation is that in what way a public welfare body could manage to commit such an act of infringement. Moreover CPA constituted of public accountants whose primary job was to investigate and audit and detect any kind of unfair practice in the books of accounts prepared by a certain entity, now if the same body committed the task that it had to find out, then it would be a real problem (Irgang, 2013). Alex Malley could very well take the firm to further heights by implementing better reforms, giving the ordinary members their lost rights and earning more revenue. He could reshuffle the board of directors, create a corruption free environment and make CPA a global standard for all the world. But instead he decided to steal the money out of the members subscription fund s and use it for his very own purpose. Another issue that peeps in from this event is that neither the CEO nor the directors are aware about the laid down policies and procedures of the institution. Had they been properly aware, they would not have used the me0bers subscription money for their own purpose. Another possibility is that there are no laid down policies and procedures of CPA or are so meager that one does not feel the urge even to follow them. Whatever may be the issue the CPA has no real stand in terms of rules, therefore is exploited by its high end members (OBrien, 2014). Conclusion The indications from the above mentioned issues lead to the same source altogether that CPA currently needs a total makeover. With the total management hierarchy being corrupt, starting from the CEO till the board of directors, the CPA has no future as such. In the history of such a glorious institution, this will be a permanent mark. CPA has already lost its goodwill in the global market and has also started facing resistance among its employees. Though all these facts are true, it is also true that all is not lost for CPA, it still has its dedicated number of members who are willing to provide service sincerely. 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