Case Studies
A Professional Lifeline To Accountants

 

 

When John applied for provisional membership in 2008 he disclosed a criminal conviction in 2006 for grievous bodily harm, when he had been given a suspended prison sentence and ordered to pay £10,000 compensation to his victim. What he did not disclose at that time was that in the previous year, he had been convicted of common assault, given a community order and ordered to pay compensation of £50.

 

The ICAEW’s Learning & Professional Development Department approved John’s application for provisional membership, but passed the file to the Professional Conduct Department. It was only then that the first conviction came to light.

 

John was asked why he had not disclosed to the Institute details concerning the first conviction. He explained that he had been given advice from a police constable friend that the conviction need not be disclosed to his professional body. That advice was wrong.

 

Both convictions were referred to the Disciplinary Committee where John was supported by his employer who described John as conscientious and well thought of by his colleagues. John was reprimanded with no order for costs.

 

The Disciplinary Committee recorded its concern that John had already served nine months of his training contract when he appeared before the Disciplinary Committee. Nevertheless, John was singularly fortunate in only receiving a reprimand, despite having a double criminal record for violence.

 

 

In October 2007, James was disqualified under the Directors Disqualification Act for acting as a director for a period of eight years. In April 2008, James was convicted of contravening an earlier disqualification order and was sentenced to six years imprisonment, suspended for two years and disqualified for 93 months to run concurrently.

 

The earlier disqualification order dated back to 2001 when James had agreed that, within 56 days, he would become a director of two separate companies, become a bank signatory for items over £10,000 and would produce monthly management accounts. James had not done any of these things.

 

Although James did not attend the disciplinary hearing (nor represented), he did make a written submission, in which he alleged that the matter had been badly handled by the DTI. He also believed that he had, at all times, acted within the spirit of the order made in 2001.

 

Inevitably, James was excluded from membership and ordered to pay penalties of £4,600.

 

 

Eric had advised Philip, his client, that Philip would be entitled to government grants of £11,100 against expenditure of £15,600. Philip subsequently received the sum of £11,100. Subsequently, an independent examination of the facts led to the conclusion that Philip was ineligible for a government grant. The grant was subsequently repaid in full.

 

Criminal proceedings were brought against Eric on the basis that he had recklessly made a statement about the eligibility of obtaining government grants against expenditure. He was given a conditional discharge for 12 months and ordered to pay prosecution costs of £10,500. The case was referred to the Disciplinary Committee. Eric was severely reprimanded with a penalty of £4,300.

 

Eric attended the disciplinary hearing together with a colleague and explained that he had not obtained any personal gain, that he had cooperated fully with the authorities and had pleaded guilty to the charge. There was no evidence of dishonesty and the public had not been disadvantaged.

 

The Disciplinary Committee placed considerable weight on the mitigation advanced.

 

 

George was employed by a leading firm of chartered accountants. He had been dismissed for making inappropriate expense claims totalling £4,900 over an 18-month period. George’s claims included excess mileage of 14,000 miles and £1,200 for mobile phone costs which were over-estimated, without any supporting documentation. The £4,900 had been repaid. No criminal proceedings had been brought.

 

George attended the hearing when he pleaded personal domestic problems and poor management of his finances, rather than any dishonesty on his part. Although George was not legally represented and was warned by the Disciplinary Committee that his conduct had brought him very close to exclusion, he was fortunate only to be severely reprimanded with financial penalties of £8,400.

 

 

Sam was employed in commerce and over a period of time, he had misappropriated £9,500 from his employers. He was subsequently found guilty on two counts of theft. However, the disciplinary report does not disclose the sentence handed down by the court.

 

Sam attended the hearing and put forward a plea in mitigation. He said that he was very contrite, that he had handed himself in to the police and had offered to make full amends to his former employers. He had also fully cooperated with the Institute and put forward details with regard to his reduced financial situation.

 

He was advised by the Disciplinary Committee that there was no alternative other than exclusion.

 

 

Bernard had submitted to the courts a proposal for a client’s IVA which contained material inconsistencies in relation to the amount likely to be repaid to creditors, the length of time and the assets to be included. In addition, over a six-month period, enquiries of Bernard made by the Official Receiver were not dealt with promptly or at all. Eventually, a court order had revoked the proposal.

 

It also emerged that the proposed IVA had never been formally approved, no creditors’ meeting had ever been convened and the chairman’s signature on the reported minutes of the meeting had been unauthorised.

 

Bernard had attended the hearing together with his wife, but was not legally represented. He explained that he had been absent from the office due to ill health, that he had had problems with regard to an unsatisfactory employee and that there had been misunderstandings about whether or not the IVA was to proceed.

 

The Disciplinary Committee was informed that there had been similar recent findings against Bernard by the Disciplinary Committee in respect of which lesser penalties had been imposed. The decision of the Disciplinary Committee was that Bernard be severely reprimanded with financial penalties of £11,200.

 

 

Hugh faced two complaints. The first was that one of his unqualified partners had accepted a loan from an audit client. Secondly, he had incorrectly stated that an audit compliance review had been completed.

 

The Disciplinary Committee imposed upon Hugh a reprimand and a financial penalty of £4,500.

 

 

The Investigation Committee imposed a consent order which involved a severe reprimand and financial penalties of £3,905 for handling £13,700 in relation to 19 clients, other than through a designated client bank account. In addition, Raymond had wrongly stated in his annual return that he had not handled any client money.

 

 

Arnold had not obtained a practising certificate, nor professional indemnity insurance for a period of three years. He was reprimanded with a penalty of £1,650.

 

 

Colin had not obtained a practising certificate for a period of six months and had no professional indemnity insurance. He was reprimanded together with a penalty of £1,990.

 

 

William had been in practice without a practising certificate for a period of five years and had had no professional indemnity insurance. He was reprimanded with a penalty of £3,200.

 

 

Kevin had not met the Institute’s CPD requirements for a period of 18 months. He was reprimanded with a penalty of £505.