CPA Australia suing NZICA

A seven-day battle between two accounting bodies kicks off at the Wellington High Court today.

Certified Practising Accountants Australia (CPA Australia) is suing The New Zealand Institute of Chartered Accountants (NZICA) for defamation.

On a number of occasions, NZICA has said that CPA had "inferior" education standards, lack of global affiliations, misused membership fees and a "second-rate designation," according to a CPA statement of claim.

In 2013, NZICA merged with the Institute of Chartered Accountants Australia as it faced competition from CPA. CPA claims a membership of more than 144,000 finance, accounting and business professionals in 127 countries.

CPA alleges that NZICA chief operating officer Kirsten Patterson said at events in Christchurch and Wellington that:

• CPA wasn't a member of the Global Accounting Alliance because its education pathway isn't up to the same standard;
• CPA doesn't have the same beneficial global partnerships with accounting bodies;
• CPA "wastes or misuses membership fees to pay for expensive television advertising"; and
• CPA is a "second-rate designation that has undermined the accounting profession in New Zealand."

CPA Australia says the statements were "false and defamatory" and, as a result of their publication, its reputation had been injured and it has been subjected to public odium, ridicule and contempt.

The statements meant it had suffered or is likely to suffer pecuniary loss in the form of damage to goodwill, reduced applications for membership, and an increase in resignation numbers, it said.

CPA's solicitor, Mai Chen of law firm Chen Palmer, is seeking a declaration that the company has been defamed, costs and other relief.

The accounting body is claiming damages of $50,000, costs and other relief.

A flyer, an ad and an article
Further, CPA alleges the NZICA also breached the Fair Trading Act in a 2011 flyer it published for students comparing the rival organisations.

In the flyer, NZICA stated the average annual salary for its members was $140,000, compared with $100,000 for CPA, that CPA has less rigorous standards and offers inferior training and mentoring upon graduation, and that CPA is not part of an international accounting alliance, according to the statement of claim.

CPA says salaries on average are equal for memberships of both organisations, it requires extensive post-graduate experience and mentoring in addition to academic experience and online training, its designation is globally recognised, it is an accredited body and it has international alliances with a range of accounting bodies.

CPA Australia further cites a full-page advertisement published in the New Zealand Herald in October 2012 with a large-font heading stating: "In accounting, there's best practice and then there's second-best practice." The ad stated that only a member of the NZICA had been exposed to the highest levels of industry training and development, which is why top CFOs and CEOs only employed chartered accountants.

The ad and comments by NZICA chief executive Craig Norgate in an NBR article gives the “misleading impression” that members of CPA are exposed to inferior training, the statement of claim says.

The flyer, advertisement and article constitute misleading and deceptive conduct in trade under the Fair Trading Act, according to CPA Australia. As a result, students and other candidates are likely to give CPA Australia reduced consideration and it is likely to suffer pecuniary loss as damage to goodwill, reduced applications for membership and an increase in resignation numbers, it says.

Lawyers acting for NZICA declined a request for the statement of defence.