Bill shakes up accounting sector
Proposed legislation, which could drive greater competition among accountants and auditors, has had its first reading in Parliament.
The Accounting Infrastructure Reform Bill would, among other things, open the way for overseas auditing firms to do statutory audits here.
It also more widely recognises the place of alternative accounting qualifications, stiffening competition with chartered accountants.
Globally-based accounting body CPA Australia welcomed the bill, with its chief executive Alex Malley saying it would make accounting more competitive in New Zealand and improve access to international expertise.
The bill before Parliament was "an important milestone" for CPA in terms of enhancing the profession and ensuring its members were acknowledged.
While the moves could mean greater rivalry with the New Zealand Institute of Chartered Accountants, they would also allow the institute to merge with its Australian counterpart, the Institute of Chartered Accountants Australia (ICAA).
Richard Moon, general counsel for the institute, said chartered accountants had been in a competitive climate for some time.
"This doesn't radically change that environment," he said.
But he was comfortable about legislation that recognised that "there are other people who are well-qualified and competent to do this work".
Another key elements of the bill would allow auditing firms to become incorporated as a company, enabling them to raise capital and limit their losses.
Moon said the reasons why auditors had been forced to remain in partnerships were historical and "lacked clear rationale", but the bill would put them on the same footing as other professionals and their Australian counterparts.
The term "chartered accountant" would be also changed to "qualified statutory accountant" in various legislation.
Accountants generally also approve of the bill's tighter regime for registered charities, which requires them to have their financial reports "assured" by a qualified auditor if their annual operational expenditure exceeds $500,000.
KPMG business advisory partner Ann Tod said there was general agreement that public confidence in the charitable sector would improve if large and medium sized registered charities were subject to greater scrutiny.
"This needs to be weighed against the assurance service costs hence excluding smaller charities."
Moon said the trans-Tasman merger of chartered accountants was expected to take place this year, subject to the bill going through.
Nearly 70 per cent of the 58 per cent of New Zealand members who voted favoured the merger.