CPA Australia calls for ‘practical and proportionate’ financial abuse safeguards

CPA Australia has thrown its support behind proposed Treasury policies to curb financial abuse through coerced directorships, but cautioned policymakers to avoid placing onerous compliance burdens on accountants.

From 26 November to 24 December 2025, Treasury opened consultation for proposed policies to combat coerced directorships, a form of financial abuse wherein a victim-survivor is forced or tricked into becoming a company director while the perpetrator runs the company and retains the benefits.

The proposed policies would aim to make it harder to register or appoint directors without clear consent, ensure victim-survivors could access defences for insolvency-related directors’ duties, extend the time frame to respond to director penalty notices and hold perpetrators accountable.

CPA Australia’s regulations and standards lead, Belinda Zohrab-McConnell, said CPA Australia “strongly supported” Treasury’s push against financial abuse, but cautioned against placing excessive compliance burdens on accountants.

“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,” Zohrab-McConnell said.

“Importantly, accountants must not inadvertently make the situation worse for victims, for example, by alerting perpetrators.”

A recent study by Monash University found that accountants often inadvertently played a role in setting up harmful or coercive financial arrangements.

Following financial abuse, the study found that victim-survivors faced consequences, including large, unexpected tax bills, bankruptcy and homelessness. They also had to navigate an unforgiving commercial debt system, which had fewer protections than consumer debts.

While CPA Australia supported Treasury’s aims, it urged regulators to avoid imposing undue compliance obligations on accountants, warning that mandatory third-party assessments or reporting duties could impose unreasonable costs and risks on small firms.

It also stipulated that changes to director removal pathways must not undermine the rights of creditors, employees, or the Australian Taxation Office to recover debts. To protect victim-survivors, it suggested empowering the Australian Securities and Investments Commission (ASIC) to replace coerced directors with perpetrators acting as shadow directors to maintain accountability.

The industry body said it would support a focus on education over enforcement, for example, teaching accountants to recognise indicators of financial abuse and guide victims to specialist services, rather than imposing additional reporting obligations.

“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,” Zohrab-McConnell said.