The rules of fairness
The much read but highly truncated disciplinary reports in the ICAEW section of Accountancy offer a tiny window into the failings of the few ICAEW members and firms who go astray. Their brevity does little justice to the effort put into delivering a disciplinary system that is both fair to members and protects the public interest.
‘It’s crucial that the public feel our work can be trusted,' says Richard Lea, chairman of the institute’s disciplinary committee. 'We must maintain our reputation and the only way to do that is properly and fairly to discipline members who don’t abide by the rules and regulations.’ Members who behave dishonestly in their professional work, or with gross incompetence, face the ultimate sanction of exclusion. They could also be fined and ordered to pay ICAEW’s costs.
Members who have not acted dishonestly, but have perhaps made silly mistakes that they are willing to correct, should not fear unreasonably harsh treatment.
Some complaints against members are generated internally, after ICAEW becomes aware of regulatory breaches through its own monitoring procedures. Some come directly from members’ clients, but many of these do not usually result in disciplinary action.
If the complaint cannot be resolved, or its nature is sufficiently serious to require investigation and possibly disciplinary action, it becomes a matter for ICAEW’s investigation committee and potentially also a tribunal. The professional conduct department investigates the facts, producing a detailed report for the committee.
Large public interest investigations among the profession are undertaken by the UK regulator’s Accountancy and Actuarial Discipline Board. The fact is that, last year, roughly 230 complaints were dealt with by ICAEW disciplinary action from among a membership of some 133,000. 'I think it’s a real testament to the quality of our profession,' says Lea. 'The majority of members provide an excellent professional service to clients or within industry. So our system deals with the few to protect the many.’
The ICAEW Support Members Scheme helps members in difficulty. ICAEW member volunteers offer totally confidential, non-judgmental help on professional or personal matters and are exempt from the duty to report misconduct. Email firstname.lastname@example.org or call +44 (0)800 917 3526
Facts and Figures
Facts and figures
- In 2010, some 230 complaints were dealt with by disciplinary action
- The disciplinary committee tribunal heard 50 cases to end September 2011, following 64 in total in 2010, 55 in 2009 and 74 in 2008
- In the nine months to end September 2011, 14 members were excluded following a disciplinary tribunal hearing, 26 were severely reprimanded, nine reprimanded and one complaint was not proved
- Of 15 private tribunal hearing applications received in 2010, eight were accepted
Range of complaints
Complaints against members are wide-ranging and have included:
- dishonest expenses claims
- breaching anti-social behaviour orders
- endorsing fake university degrees
- providing false accountants’ references
- accepting loans from or making loans to clients
- failure to certify CPD
- defective audit work
- ignoring Audit Registration Committee requirements for file reviews
- failure to obtain professional indemnity insurance
- breaching insolvency practice rules
Hints and tips if you face a complaint
- Engage: respond to ICAEW correspondence promptly and provide explanations and mitigating evidence
- Use Members Support: a volunteer can talk you through the disciplinary process and even potentially attend the tribunal with you
- Complete the financial questionnaire: otherwise the tribunal will assume you have the means to pay any level of fine and/or costs
- Attend: tribunal members appreciate genuine regret and acknowledgement of mistakes, and particularly clear willingness to put matters right
- Consider legal representation: the skills of a solicitor or barrister to explain circumstances or set out mitigating factors can be helpful, particularly in serious cases where exclusion could well apply
Case study: Soldier of fortune
Among chartered accountants past and present, few could be more infamous than former FCA Thomas Michael Hoare. A hero to many, a villain to others, Hoare was born in India in 1920. After serving as a British army captain in North Africa during WWII, he qualified as an ICAEW member in 1948.
Hoare came to international attention through his activities in postcolonial Africa in the 1960s. As perhaps the world’s most famous mercenary since Xenophon, he conducted operations in the rebellious Congolese province of Katanga.
A couple of years later, his group, now known as ‘5 Commando’, worked with Belgian paratroopers to rescue civilian hostages held by Simba rebels in Stanleyville. This operation saved hundreds of lives.
However, his actions, during what was seen by many as a proxy war between the Soviet Union and the West, led to opprobrium from behind the Iron Curtain. East German radio demonised him as ‘the mad bloodhound Mike Hoare’, usually now shortened to ‘Mad Mike’ by fans and detractors alike.
The silver screen paid its own tribute to Hoare with the film The Wild Geese, in which Richard Burton’s character was believed to have been modelled on Hoare himself. Hoare was employed as a technical advisor on the film.
Although many ICAEW members considered his activities unsavoury, the institute was unable to expel Hoare from membership. He had not broken any ICAEW rule and was also scrupulous about paying his membership subscription.
In 1981, his failed coup d’état in the Seychelles changed all that. Hoare and his followers had landed in the country disguised as a charitable drinking club known as ‘The Ancient Order of Froth-Blowers’ with their weapons hidden beneath false bottoms in their luggage. After heavy fighting at Mahe airport, Hoare and his team refuelled and then boarded an Air India aircraft, directing the captain to fly them to South Africa. Hoare was later found guilty of hijacking and was sentenced to 10 years in prison. On the back of his criminal record, ICAEW excluded him from membership in August 1983.
Hoare still resides in South Africa and has published numerous books about his experiences. To our knowledge, he no longer practises as an accountant.