Key witness in CPA defamation case admits getting her facts wrong
By Jenny Ruth
A key witness in CPA Australia’s defamation case against the former New Zealand Institute of Chartered Accountants has admitted she got her facts wrong.
NZICA chief operating officer Kirsten Patterson told the High Court in Wellington she was wrong in saying that CPA didn’t belong to the Global Accounting Alliance because its education standards weren’t up to scratch.
The GAA, described in court as “the club” of the chartered accountants institutes, only allows one member from each country so, because NZICA belonged, CPA couldn’t belong and had never applied to belong.
“I now understand I had made a mistake about the GAA requirements for education and didn’t know only one organisation could belong,” Ms Patterson said.
NZICA has since merged with its Australian counterpart and Ms Patterson is now New Zealand country manager of Chartered Accountants Australia and New Zealand.
During cross examination, Ms Patterson agreed she could have chosen her words better in two speeches she gave at conferences in Christchurch and Wellington.
She also admitted she had been briefed at a high level only about the differences between the CPA and NZICA education programmes and qualifications, lacked detailed knowledge or any direct experience of the differences.
Ms Patterson, who isn’t an accountant, admitted she had been wrong in saying people could enter the CPA training programme without a degree and that she hadn’t been aware of the details of CPA’s foundation programme for those who had degrees other than a commerce degree.
“At the time, I thought it was a fair summation of the main differences,” she said.
CPA’s barrister, Alan Galbraith, QC, asked her: “Do you agree, if you don’t know a topic well, that there’s every chance that you might not represent the position accurately to an audience?”
Ms Patterson replied: “Absolutely.”
“Lazy” students choose CPA?
Mr Galbraith asked whether Ms Patterson’s comment in her speeches that “lazy” students would chose the CPA education programme was derisory.
Ms Patterson agreed it was “flippant” and “not how I would probably frame it now. I made a flippant comment. My understanding at the time was that you didn’t necessarily have to have a degree to complete the CPA program. I understand now that the majority of people do have a degree.”
Ms Patterson also admitted there are exceptions to the rules in both programmes.
Ms Patterson said a survey of students had found they believed it was “faster, cheaper and easier” to obtain a CPA designation than to become a chartered accountant.
The NZICA qualification is better than the CPA one: “I firmly believe that to be true.”
Mr Galbraith asked her if, as a member of NZICA’s management team, she had raised any concerns about a flyer distributed at a university which said chartered accountants were “first class” and other types of accountants were “second class.”
Ms Patterson said she wasn’t responsible for the flyer but hadn’t raised any concerns about it.
“I wasn’t sufficiently concerned to take action at that time,” she said.
Mr Galbraith suggested Ms Patterson’s attitude to assertions in the flyer, such as that only chartered accountants have the highest ethical standards, was that it didn’t really matter.
“This seems to be the approach you’re displaying in the witness box.”
Ms Patterson said she didn’t think the flyer was representative of NZICA’s marketing.
Disapproval of “aggressive” marketing?
She refused to back down on some other assertions, including her disapproval of the amount of money CPA had been spending on advertising and marketing.
Mr Galbraith asked Ms Patterson about her assertions that CPA had been offering free iPads to new members.
CPA New Zealand country manager David Jenkins has already given evidence that CPA and KPMG had discussed the possibility of giving out iPads but decided against it.
“We understand it was vetoed by KPMG, not by CPA, and CPA continues to explore this possibility with other firms,” Ms Patterson said.
Mr Galbraith asked her: “You don’t consider Mr Jenkin’s evidence to be truthful?”
Ms Patterson answered: “No, I don’t.”
Mr Galbraith quizzed her on her description of CPA’s marketing as “aggressive.”
“I think it was very strong, very overt …. Strong, overt, aggressive, I consider those terms interchangeable. There was a very marked increase and a very strong marketing presence in a very short period of time,” she said.
Mr Galbraith asked: “What do you expect them to do? Sit at home and knit and hope that people find them? This is absolutely normal activity in a market, isn’t it?”
Mr Galbraith asked Ms Patterson whether those in a profession would “regard being negative about other professionals as being not at all professional.”
She replied that she didn’t agree. “It depends on the circumstances.”
The National Business Review (NBR) Online is New Zealand's authority in breaking business news and analysis.
Access NBR online paid stories and on-demand audio.