CPA Australia backs government efforts to combat coerced directorships, calls for balanced reforms

Australia’s largest accounting body, CPA Australia, has welcomed Treasury’s consultation on measures to address financial abuse through coerced directorships, describing the initiative as an important step toward protecting vulnerable people. 

However, CPA Australia cautions that reforms must avoid creating onerous compliance burdens for the accounting profession and ensure the rights of third parties are preserved.

“CPA Australia strongly supports Treasury’s objectives to reduce the misuse of corporate structures for financial abuse,” said Belinda Zohrab-McConnell, CPA Australia’s Regulations and Standards Lead. 

“Accountants play a vital role in corporate governance, but they are not trained social workers. Any new obligations must be practical, proportionate and avoid exposing accountants, their staff, families or their clients to personal safety risks. Importantly, accountants must not inadvertently make the situation worse for victims, for example, by alerting perpetrators.”

CPA Australia’s submission highlights several key considerations:

• Avoid excessive compliance obligations: While safeguards such as identity verification and informed consent checks are commendable, CPA Australia warns that mandatory third-party assessments or reporting duties could impose unreasonable costs and risks on small firms.
• Protect third-party rights: Changes to director removal or resignation pathways must not undermine the rights of creditors, employees or the ATO to recover debts. CPA Australia suggests empowering ASIC to replace coerced directors with perpetrators acting as shadow directors, where appropriate, to maintain accountability.
• Education over enforcement: CPA Australia supports educating accountants to recognise indicators of financial abuse and guide victims to specialist services, rather than imposing mandatory reporting obligations that could breach confidentiality under professional standards.

Ms Zohrab-McConnell said: “We urge Treasury to consult widely to ensure reforms strike the right balance – protecting victims of abuse without creating unintended consequences for innocent stakeholders or imposing impractical obligations on professionals.”

CPA Australia also recommends that any legislative changes align with existing frameworks under the Corporations Act, Tax Administration Act 1953 and professional standards such as APES 110 Code of Ethics for Professional Accountants.

Media contact

Simon Downes, External Affairs Lead
[email protected]
+61 0401 461 503