Explanatory Memorandum – Approval of Supplemental Royal Charter and By Laws of Chartered Accountants Australia and New Zealand:
On 26 November 2014 a Supplemental Royal Charter ("the Charter") was granted to the Chartered Accountants Australia and New Zealand (formerly known as The Institute of Chartered Accountants in Australia ("the Institute").
Article 26 of the Charter provides that the Institute may, by resolution passed by a majority of not less than two-thirds of such members as are entitled to vote and who vote in a ballot conducted in accordance with the By-Laws, amend or add to the Charter and such amendment or addition shall when allowed by the Governor General henceforth continue to operate as if it has originally been granted and made accordingly.
Prior to the amendments being approved, Article 21 of the Charter provided that the Institute may from time to time, by resolution approved by a ballot conducted in accordance with the By-laws, make such By-laws for the better execution of the Charter, the furtherance of the objects of the Institute and generally for regulating the affairs of the Institute as to the Institute seem fit and may from time to time rescind, vary or add to any By-laws and make others in their stead, but so that the By-laws for the time being are not in any respect repugnant to the laws of the Commonwealth of Australia or of any of the States or Territories comprised in the Commonwealth, or inconsistent with the express provisions of the Charter.
Article 22 of the Charter provides that no By-law or any rescission or variation thereof or addition thereto shall come into operation until the same shall have been submitted to and approved by the Governor-General in and over the Commonwealth of Australia or the person for the time being administering the Government of the Commonwealth of Australia.
Article 23 of the Charter provides that the Board of the Institute shall cause all such By-laws, when approved, to be printed and published together with the formal approval of the Governor-General in the Official Gazette of the Commonwealth of Australia.
The Institute sought approval to amend both the Charter and By-laws to give effect to an amalgamation between the Institute and the New Zealand Institute of Chartered Accountants ("NZICA"). The amendments were approved by the Governor General on 26 November 2014. The proposed amendments to the Charter and By-laws were approved by resolution of the requisite majority of members in an electronic and postal ballot of members conducted in accordance with the Charter and By-laws in October 2013.
The principal amendments to the Charter include:
Expansion of the principal objects (set out in Article 3) to incorporate some of the objects of NZICA. These additional objects include:
o the promotion of training and education of persons practising the profession of accountancy; and
o the promotion of quality, expertise and integrity in the profession of accountancy by its members;
Expansion of the ancillary objects and powers of the Institute (set out in Article 4) were extended:
o to grant the Institute the power to enter into agreements to give effect to a merger with other institutes, societies and bodies of accountants;
o to exercise any rights conferred on it which are consistent with the objects under the NZICA Act and NZICA Rules;
o to prescribe rules of professional conduct governing participation or services ordinarily conducted by a public accountant in New Zealand as well as Australia;
o to make grants or financial contributions to NZICA; and
o to advise members of the board of NZICA with respect to issues that will advance the objects of the Institute and interests of all members;
Membership to the Institute was amended to provide for:
o the addition of Associated Chartered Accountants and Accounting Technicians as classes of members (amendment to Article 5(a), Article 7 and 16);
o the automatic admission of NZICA members, at the time the amalgamation becomes effective, to the Institute (a new Article 5(c)); and
o the ability of the Institute to refuse admission or advancement of any member or class of member (Article 8);
The establishment of a new governance structure including the introduction of an Institute Council;
The introduction of New Zealand Designations (Article 16);
Amendments to Articles 21 and 25 to reflect the need for the impact of the By-laws and Regulations to be consistent in New Zealand with the Laws of New Zealand, in particular the NZICA Act and NZICA Rules; and
The change of name to Chartered Accountants Australia and New Zealand.
The principal amendments to the By-Laws include:
Changes to the membership structure including:
o to reflect the introduction of new classes of membership;
o the admission of NZICA members to membership of the Institute; and
o that resignation from membership of the Institute is to be taken as resignation from NZICA membership;
Changes to professional conduct provisions including that the NZICA Act and NZICA Rules will provide for the regulation of the professional conduct of members of NZICA who are practising the profession of accountancy in New Zealand;
The introduction of a New Zealand Regional Council;
The introduction of an Institute Council;
Changes to how the Institute Board is to be appointed as well as how each Board member's remuneration is to be set and an expansion of the Board's power to extend to jurisdictions outside of Australia.
The introduction of the New Zealand Appendix which contains provisions that specifically relate to governance of the Institute's members who practise in New Zealand.
A complete version of the new Charter and By-laws can be obtained on the Chartered Accountants Australia and New Zealand’s website www.charteredaccountantsanz.com/governance