Warranted professionals, like doctors, accountants and engineers, have to abide by minimum standards of behaviour defined by statutory regulations.
All warranted professions invariably have a second layer of more defined standards which their members are expected to follow. Self-regulation is one of the most jealously defended rights of all warranted professions.
Recent events connected with the alleged abuse of power and non-observance of behavioural standards by three accountants have been a severe cause of concern for many in the accountancy profession. Accountants Brian Tonna, Karl Cini and Manuel Castagna, working for accountancy firm Nexia BT, are being charged with serious crimes, including fraud, falsification of documents and money laundering.
A shadow has long been cast on the financial sector, and not just on their profession, by the suspicions surrounding the bad apple that Nexia BT became. The company came to prominence in the public eye in the wake of the Panama Papers leak five years ago.
The Accountancy Board, the statutory regulator of accountants, and the Institute of Accountants, the profession’s lobby group that defines non-statutory professional standards, have acknowledged the harm done and taken a stand against these accountants.
However, it was only in September of last year that the board decided to take disciplinary proceedings against Nexia BT and against Tonna and Cini. The action waited until Magistrate Natasha Galea Sciberras had concluded her inquiry into the role of the company in the kickbacks saga that involved Keith Schembri.
The board came under harsh criticism when, in the Daphne Caruana Galizia murder inquiry, the judges asked its chairman, Peter Baldacchino, why he acted so late in sanctioning the three accountants. He defended the delays by saying that the removal of warrants had been discussed but no action taken until there was ‘reasonable suspicion’. Judge Michael Mallia argued that “there was reasonable suspicion from the very beginning”.
The institute had started investigating Tonna and Cini in 2017 but had to abort the process when they resigned from the body. A few days ago, its president, Fabio Axisa, wrote to his members lamenting the damage caused to the accountancy profession by this affair.
Axisa wrote: “The events in the last few days undoubtedly represent a very dark page in the history of the accountancy profession in Malta. The recent events are extremely hurtful, embarrassing and shameful.” He also accused the board of ignoring the institute’s proposals to “enhance the profession’s regulatory infrastructure”.
The public needs to have trust in important professions on whom they rely for their well-being, whether financial or otherwise. They expect both statutory regulation and self-regulation of warranted professions to be strict and to hold practitioners to the highest standards of behaviour. Both the board and the institute must ensure that they immediately defend the public interest when accountants fail to adhere to high standards of professional conduct.
While the board has the sole right to withdraw warrants of accountants that breach the minimum standards of professional conduct, the institute may need to define a stricter code of ethical conduct that its members must follow.
Such a code would be mandatory for those who opt to be members of the institute. Waiting for the board to update the Accountancy Profession Act defeats the purpose of keeping professional standards constantly updated.
Regulators of professional bodies will only enhance the public perception of warranted professions if they promote the public’s interest as their primary objective. Both the board and the institute need to engage in a more sincere soul-searching exercise if they want the public to trust accountants as committed professionals.