Case Studies
A Professional Lifeline To Accountants

We specialise in providing a full range of services to the accountancy profession. We are able to advise, assist and represent accountants on a whole range of issues.

No two professional bodies are alike

 

With regard to the accountancy profession, each professional body has its own procedures. Although most regulations are identical, there are differences. Here are some examples we have encountered.
 
Firstly, there was the decision where the ICAEW has insisted that a member having dual membership with the ACCA and holding an ACCA practising certificate, must also hold an ICAEW practising certificate. The ACCA does not have a similar rule.
 
Secondly, there are major differences between the ICAEW and the ACCA regarding an appeal against the decision (finding and/or order) of the Disciplinary Committee. The ICAEW’s procedures are as follows:-
 
  1. The appeal must be served within 28 days of the Disciplinary Committee’s decision.
  1. The appeal will be invalid unless within 28 days of service of the Disciplinary Committee’s written record of decision, the appellant serves grounds of appeal.
  1. If the appellant was excluded from membership, he must pay the costs (but not the fine) imposed by the Disciplinary Committee.
Although there are other provisions, particularly concerning late appeals, these are the essential procedures to be complied with.
 
The ACCA’s procedures are more complex:-
 
  1. An appellant cannot simply appeal either the finding or order of the Disciplinary Committee. He must obtain permission.
  1. An application for permission to appeal must be made within 30 days of service of the reasons for the Disciplinary Committee’s decision.
  1. The appellant must complete an application form and set out therein his grounds of appeal.
  1. The grounds must fall within one or more of six categories:-
a)      The Disciplinary Committee made an error of fact or law.
b)     It misinterpreted a by-law or regulation.
c)      It failed to take into account certain relevant evidence.
d)     There is new evidence not previously available.
e)      The order is disproportionate or unreasonable.
f)       There was a serious procedural irregularity.
 
And insofar as (a) to (d) are concerned, the appellant must demonstrate that this would have altered the finding or order.
 
  1. The application will be considered by the chairman or vice-chairman of the Appeal Committee who will only give permission if he considers that the appeal has a real prospect of success.
  1. The chairman or vice-chairman can refer the application to the full Appeal Committee for consideration, but cannot chair that meeting.
  1. The appellant can challenge the decision of the chairman or vice-chairman before the full Committee.
  1. If the Appeal Committee grants permission, the appeal itself can be heard immediately thereafter.
  1. There is no requirement to pay Disciplinary Committee costs following exclusion, unlike the ICAEW.
In our experience, permission is never easy to obtain. In the last four cases handled by us, permission was granted in one case and that was only in respect of the order, but not the finding. In one of the other three cases where permission was refused, the client was represented by counsel.
 
Thirdly, imagine you are a qualified accountant with a UK qualification. You also hold a qualification with an overseas accountancy body. They take disciplinary proceedings against you and you end up with a disciplinary record. Can you also be disciplined by the UK disciplinary body?
 
If you are a member of the ICAEW and you have been the subject of an adverse finding by the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in Ireland, the ACCA, CIMA or CIPFA, then that would be conclusive evidence of misconduct. The facts do not have to be proven again before the ICAEW’s Disciplinary Committee.
 
In respect of overseas bodies, an adverse finding is not automatically misconduct insofar as the ICAEW is concerned. It would have to investigate the matter afresh, before putting the facts before the Disciplinary Committee and then only if there is a prima facie case of misconduct.
 
With regard to the ACCA, a member is liable to disciplinary action if he has been disciplined by another professional body, whether in the UK or overseas.
 
The problem with the ACCA’s procedure is that some overseas professional bodies have highly unsatisfactory disciplinary procedures and do not conduct themselves in accordance with the established principles of natural justice. As a result, this can cause injustices, particularly when the ACCA decides to take its own disciplinary proceedings.
 
Finally, there is the matter of legal costs. For members of Accountants' Defence (our associated company), that is no problem as legal costs are covered up to a maximum of £10,000. But what if the accountant who faces the Disciplinary Committee or Appeal Committee is not a member of Accountants' Defence and cannot meet the legal costs estimate provided by his solicitors? He may persuade his professional indemnity insurers to meet these costs, particularly if the complaint is likely to lead to a claim. But underwriters will not become involved if there is no prospect of a claim materialising. Alternatively, the accountant may have the benefit of legal fees insurance. But, otherwise, can he seek funding from his own professional body by whom he is under investigation?
 
Only CIPFA has a procedure where the member can seek funding from CIPFA in respect of his legal costs concerning disciplinary proceedings. That is largely because most members of CIPFA are either NHS or local government employees and would be unlikely to fund legal costs out of salary/savings. Nevertheless, funding is not automatically given. In the only case in which we have been involved, funding was refused, despite:-
 
  1. A multiplicity of charges.
  2. Papers running to over 1000 pages.
  3. CIPFA being represented by counsel.
  4. CIPFA calling an expert witness against the defendant.
A more worthy case for funding would be difficult to find.