NSW Fair Trading Minister Matt Kean has threatened to effectively deregister the accounting body CPA Australia.

Mr Kean says he has received legal advice that a new professional standards scheme for CPA Australia should not be approved.

If it is not approved, it could expose thousands of CPA members to massive levels of liability.

Mr Kean said the CPA’s financial consulting side-business, CPA Advice, created a potential conflict of interest because it is in competition with the organisation’s members.

CPA Advice has just 25 members, but has been helped by $12.4 million in cash from CPA Australia in the past year.

Mr Kean said it created serious concerns.

“They potentially jeopardise our ability to approve it as a professional standards scheme in NSW,” he said.

But CPA boss Alex Malley accused the Minister of interfering in due process.

“How is it that confidential Crown advice in a process with an independent statutory authority is now being commented on by a Minister,” he said.

“It clearly means that the Minister has at best been incompetent and reckless, this is his portfolio and he's commenting on a process that's still underway.

“What is extraordinary is there have been no conversations at all in any process thus far questioning our governance.”

Mr Kean has said Mr Malley should focus on finding a solution.

“I would say to CPA get your house in order, respond to the concerns raised by the professional standards council and stand up for your members,” he said.

Mr Malley said CPA Australia would make sure its members’ liability remained limited.