User:Deaneus/sandbox

Basic overview
‘Events occurring at CPA Australia, Australia’s largest organisation of accountants, culminated in the removal of the entire board and CEO in one of Australia’s biggest corporate governance failures.

June 2015

 * 5 June 2015: CPA Australia announces an intention to enter the financial advice market.

April 2016

 * 18 April 2016: ASIC, the Australian Securities and Investment Commission, grants an Australian Financial Services (AFS) licence and an Australian Credit Licence (ACL) to CPA Australia's wholly owned subsidiary, CPA Australia Advice Pty Ltd.

January 2017

 * 29 Jan 2017: Joe Aston, a reporter with the Australian Financial Review, reports on CPA Australia’s sponsorship of the Australian Open tennis tournament. He points out the strange positioning of the brand, comparing revenues and market segments, with CPA Australia (revenue $170m) being more akin to a trade union than other major sponsors Optus ($9.1 billion), ANZ Banking Group ($20.5 billion), Kia ($55 billion), Emirates Airlines ($33.5 billion) and Blackmores ($717 million).  Tennis courts are plastered throughout the tournament in the CPA logo.

February 2017

 * February 2017: Brett Stevenson, a CPA member from country NSW, grows concerned about CPA Australia's governance and strategic direction after reading the AFR article, and contacts CPA Australia with his concerns. He is not happy with the response.


 * 21 February 2017: CPA Australia is reported as being optimistic about the prospects of their financial advice subsidiary despite only 18 members having signed up to the network in 14 months.


 * 21 February 2017: Brett Stevenson uses the CPA Australia website “Find a CPA” function to get the emails of about 100 CPAs in public practice, and sends his first email group email to members to raise his concerns.


 * 22 February 2017: the “Find a CPA” functionality is removed from the CPA Australia website, as well as contact details for state boards.

March 2017

 * March 2017: Some discussions on the official CPA Australia LinkedIn group about governance. Two in particular, raises more questions than it answers.


 * March 2017: Some discussions were moderated on the LinkedIn discussion group. Revealed only recently that CPA Australia had referred at least one post to its legal team. Who knows why.


 * March 2017: Brett's email list rapidly grows to about 600 concerned members.


 * 16 March 2017: CPA Australia board of Directors releases the first "Important Member Information" document to attempt to address concerns. The document contains some misleading information.


 * March 2017: An FOI request is put in to the Tax Practitioners Board (TPB) to find out how CPA Australia satisfied the TASA Regulation 1 - 207 (1) that the management of the organisation is required to be accountable to the members.


 * Late March 2017: The www.cpamembers.org website is launched, registered anonymously in the Bahamas and hosted in Iceland, a country with progressive freedom of speech laws.

April 2017

 * April 2017: Brett has 100 signatures on a resolution to amend the constitution to reduce Director fees by half. A tactical decision is made in consultation with others to not put this up for a vote because the level of fees is just the tip of an iceberg. We did not want to risk creating the perception that the problem had been solved. Although this particular resolution has insanely massive support. We felt that the real issue here is that the constitution does not allow members much or any control.


 * April 2017: Brett requests a copy of the members register under section 173(3) of the Corporations Act. The hope is that it would contain email addresses and enable Brett to communicate his concerns to the entire membership. It costs about $2,500 Brett sends round the hat and has the money in 24 hours.


 * April 2017: About a week later Brett is give a copy of the members register. Unfortunately, it does not contain email addresses. However, another more serious breach is that the Member Status (ASA/CPA/FCPA/Honorary/Life) has been removed. This was only discovered in June 2017 through members of this website asking questions to Brett about the register. A failure to comply with section 173 can be punishable by 3 months jail.


 * April 2017: CPA Australia has their AGM in Singapore. Tyrone mentions that CPA Australia has done a lot of great things including "funding research"


 * April 2017: FOI requests are put in to some universities to try to find out how much research funding has been paid. At the time of writing we are still waiting for a response.


 * 28 April 2017: Brett, supported by over 100 member signatures puts in a Corporations Act s202B request to disclose all Directors remuneration and other payments. Strangely this requires no other action than disclosing the money they are getting paid but seems to have triggered all the Directors resignations so far. More on that later.

May 2017

 * 1 May 2017: CPA Australia releases an email to members claiming they may soon “receive unsolicited correspondence from a member, who has requested access to CPA Australia's full register of members”. CPA Australia also says “It is with regret that we have released this information to the member” despite the release of this information being correct under the Corporations Act 173(3).


 * May 2017: CPA Australia lodges the CPA Australia Advice financial statements with ASIC late (due in April). They were signed off on 14 February. Some people wonder if it was done that way because it's after the AGM.


 * May 2017: CPA Australia Advice financial statements are a disaster. $7.5m loss and $46k revenue. About 20 members as at 31 Dec. The thing looks like it's never going to be financially viable. CPA Australia announces it will reduce fees for tier 1 and tier 2 but not tier 3 (not sure date of this announcement). Perhaps they have enough members at tier 3. The business acumen of Alex Malley is seriously questioned.


 * Late May 2017: The FOI response is received from TPB in relation to how CPA Australia passed the criteria that the management is accountable to the members. A question on CPA Australia's application form asks something like: Is the management of the organisation required to be accountable to the members? CPA Australia answered by saying "Yes. See 2010 annual report and constitution". The date of the application was May 2009 so it should have referred to the 2009 annual report. The TPB did not ask for any elaboration was unable to provide any internal work papers on the assessment of this criteria. The TPB does not have any guideline or policy on how they assess this criteria and was only able to refer to a page on their website which only states what documents to attach to your application. A complaint has been made about the TPB to the Inspector General of Taxation (IGT).


 * 30 May 2017: The board approves the release of the s202B response. Tyrone Carlin quits on this same day citing the need for renewal. Two subsidiary companies are left off the s202B response which means they failed to disclose remuneration of about 5 Directors. Also the remuneration for Awty and Hughes would need to be audited. Wording from some CPA Australia email responses suggests that payments other than Directors fees have not been disclosed. The report was audited by Deloitte but only are per the flawed basis of preparation that was drafted by CPA Australia.


 * May 2017: AFR questions how many actual CPA (voting) members CPA Australia actually has. Is it really the biggest accounting association in the country? This information was last reported in about 2008 and then it was about 45% ASAs.

June 2017

 * 4 June 2017 - Deloitte's conflicting audits on CPA Australia, Advice subsidiary - Alex Malley can denigrate those of his members who were prepared to fight for transparency in the face of intimidation, but never forget: what CPA Australia's leadership pays itself had to be dragged from them by an instrument of Commonwealth statute. And confirmation last week that in addition to their already free-handed fees, directors and executives pay themselves second honorariums for service to a fully-owned subsidiary, CPA Australia Advice, is the kind of piss-taking that could only have been learned at the Urological Society - https://www.afr.com/rear-window/deloittes-conflicting-audits-on-cpa-australia-advice-subsidiary-20170604-gwk5wn


 * Early June 2017: The s202B response is analysed and it shows that the Directors are paid above the CPA Australia Constitutional limits imposed by Article 45. The board claims that Article 45 does not apply to payments from a subsidiary. The CPA Australia financial statements state that the Directors are paid under Article 45 and the amount disclosed (in aggregate) did include the payments from CPA Australia Advice. Further the CPA Australia Advice financial statements stated that the Directors were paid under Article 45 of the CPA Australia constitution. CPA Australia now says that was wrong and that they are paid under the constitution of CPA Australia Advice. We have requested a copy of that constitution.


 * June 2017: The NSW Crown Solicitor expresses concerns that CPA Australia cannot be a regulator of accountants as it competes with them over the provision of financial advice; vis a vis you cannot regulate a competitor. It is further revealed these concerns were raised with CPA Australia over 18 months ago, before most of the money was burned.


 * June 2017: Revealed by the AFR that CPA Australia has been offering free skilled migration visa assessments with a membership to overseas accountants. Further reinforcing the possible artificial inflation of member numbers.


 * June 2017: CPA Australia confirms in email that they are preparing another s202B disclosure for the 2 subsidiaries. What's the problem with having one disclosure that complies and audited as such?


 * June 2017: CPA Australia Advice financial statements show that equity was $2.8m and the loss about $7.5m. CPA Australia financial statements had incorrectly disclosed the equity of CPA Australia Advice as $1 and a loan of $5.5m covering up the extent of the loss of CPA Australia Advice. More questions for the auditor.


 * 5 June 2017: the AFR reports the CPA Australia Advice financial advice arm has only 25 licensees, and has generated only $46,000 in fee income, against staff expenses of $3.8 million with $1 million paid to eight directors and key management personnel including the CEO of both organisations, Alex Malley, for a $5.8 million loss in 2016. Further, they report the entity has lost $7.4 million in 19 months of operation.


 * 7 June 2017: Independent Director Richard Alston resigns along with the only other independent director, lawyer Kerry Ryan, because board allies refuse to allow a wide-ranging review of Mr Malley and the organisation. Two more Directors resign. Putting a stake in the ground claiming to have been requesting a review of the governance/strategy of the organisation.


 * June 2017: A few days later another Director resigns.


 * June 2017: ASIC confirms they are investigating CPA Australia.


 * 9 June 2017: Director David Spong resigns.


 * 11 June 2017: CPA Australia board schedules emergency meeting for 13 June citing they need to respond to some unfair campaign from the AFR. Apparently all the above is the AFRs fault. The 13 June meeting is reported to have gone for 6 hours.


 * 14 June 2017: Directors preannounce a significant announcement by the Chair and CEO for this Friday 16 June.


 * 15 June 2017: Three more directors resign – Deborah Ong, Jennifer Lang, Martin Hourigan. With only 5 directors left the board does not have a quorum.


 * 16 June 2017: the Board of CPA Australia announces an independent panel to conduct a review of claims raised by members and other stakeholders.


 * 16 June 2017: The significant announcement turns out to be a review into "claims made" about CPA Australia. The terms of reference are not released (yet). But the media release has no reference to governance or strategy so it's unclear what is being reviewed. The so called fiercely independent review has 3 members, 2 are announced and they have both endorsed The Naked CEO book and spoke glowingly about Alex Malley as well as having other links.


 * 16 June 2017: The Directors also announce that they have appointed a new Director, Tim Youngberry, so that they can form a quorum. Some expected the Directors would be forced to call an EGM. The question arises whether the appointment of this Director is constitutionally valid.


 * 23 June 2017: The Board announces the termination of Malley's contract, "to allow CPA Australia, CPA Australia staff and Alex to move forward". He receives a payout of $4.9M. Adam Awty is appointed interim CEO, but with the same remuneration as his COO role. The board also announces it will seek further expressions of interest for casual vacancies arising from the mid-term director resignations.

July 2017

 * 4 July 2017: former CPA leaders demand an EGM


 * 13 July 2017: CPA Australia lurches deeper into crisis with an influential group of sixteen past state presidents and accounting industry leaders demanding an extraordinary general meeting (EGM) to allow members to take back control of the organisation.

August 2017

 * 22 August 2017: Deloitte denies any wrongdoing over its audits of CPA Australia in an ongoing battle with two disaffected members over the accuracy of disclosures made by the nation's largest accounting body. The members, accountants Andrew North and Greg Angelo, both made - https://www.afr.com/business/accounting/deloitte-denies-wrongdoing-in-cpa-audits-20170817-gxy9h2

November 2017

 * November 2017: CPA Australia's corporate tickets to the Australian Open are put into a lottery for members.

February 2018

 * 11 February 2018: CPA Australia's new president Peter Wilson unveils own inflated pay - Alex Malley and his merry band of board allies might have left the building, but one thing hasn't changed a bit at CPA Australia's Southbank tower: they still like sneaking out unpalatable disclosures in the dying hours of Fridays! As business wound down last week, the new board of the acutely diminished professional standards and training body for accountants announced its response to the so-called "independent" review of its governance led by former Commonwealth Auditor-General (and long-time Malley acquaintance– he even penned an endorsement of Malley's book, The Naked CEO - https://www.afr.com/rear-window/cpa-australias-new-president-peter-wilson-unveils-own-inflated-pay-20180211-h0vwie

March 2018

 * 23 March 2018: CPA Australia's board prepares to battle members – again - CPA Australia members are pushing to cap director pay, permit members to directly elect the board, and to have chairman Peter Wilson removed at the accounting body's make-or-break annual general meeting next week. https://www.afr.com/business/accounting/cpa-australias-board-prepares-to-battle-members--again-20180514-h101n9

July 2018

 * 20 July 2018: CPA Australia shuts down licensing arm - The Board of CPA Australia confirmed to members and Accountants Daily this afternoon it has decided to exit the business of CPA Australia Advice. The move will be finalised by the end of the calendar year, and authorised representatives have been notified of the change.  PwC's review of CPA Advice concluded the loss-making entity was not financially viable, after an investigation recommended by former auditor-general Ian McPhee. Mr McPhee's recommendation followed the association's corporate governance crisis last year. CPA Advice has struggled from its launch in 2015 to attract members, falling hundreds short of its business projections by year end 2017. It’s also reported a combined trading loss of $7.4 million in November last year since inception.  Housing a dealer group under the CPA Australia brand has also posed severe regulatory conflicts for the association, including the renewal of its professional standards scheme last year, which provides liability coverage for members in public practice. The Board also noted the potential for CPA Advice to prevent CPA Australia from being a monitoring body under the federal government's incoming education requirements, meaning members would have to join another body to be accredited to provide financial advice.  Accountants Daily has questioned the viability of CPA Advice since its launch in 2015. You can read more about its troubled history here.

December 2018

 * 20 December 2018: The Board of CPA Australia Ltd (CPA Australia) wishes to announce that the Australian Securities and Investments Commission (ASIC) has consented to the resignation of CPA Australia’s auditors, Deloitte Touche Tohmatsu, effective from the date of this notice. https://www.cpaaustralia.com.au/media/notice-of-change-of-auditor