Duty to Report Misconduct: new guidance released
New guidance on the ICAEW Duty to Report Misconduct dispels myths and provides clarity for members looking to make a report.
After consulting with firms and members about the Duty to Report Misconduct, ICAEW has released updated guidance to provide more clarity on when members should make a report, and how to do it.
This comes after staff in ICAEW’s Professional Standards Department became aware of knowledge gaps among members and firms as to what needs to be reported and what doesn’t.
What is the Duty to Report Misconduct?
Under Disciplinary Bye-laws (DBLs) 9.1 and 9.2, members are obligated to report misconduct – either their own or the misconduct of other members or persons subject to the DBLs, such as students or member firms.
Members are required to report matters which, if left unreported, could adversely affect the reputation of ICAEW or the profession as a whole. Examples of cases that would require the member to make a report include:
- intentionally providing false or misleading information to a principal, employer, senior manager, client or regulator, among others;
- knowingly (or recklessly) breaching AML requirements;
- abusive or intimidating behaviour directed at employees, managers, clients or other third parties;
- harassment, sexual or otherwise;
- being convicted of a criminal offence (minor motoring offences that do not result in disqualification are an exception);
- inappropriate use of social media.
This sample list is a mix of professional and personal misconduct, but longer (non-exhaustive) lists in each category are available in the guidance.
It pays to self-report
If you have been involved in any behaviour or activities that qualify as misconduct, you should self-report to ICAEW. Not only is it the right thing to do, but it could also work in your favour in the outcomes of any disciplinary investigation. “Within the guidance on sanctions credit is given within sanctions for there being an admission,” explains Carrie Langridge, ICAEW’s Senior Manager – General, Compliance and Tax Investigations. “Part of our remit is about acting in the public interest. And it is in the public interest for us to deal with these matters as promptly as we can. And quick reporting assists us in doing so.”
Who else should report?
If an incident occurs at an individual’s workplace, generally the most senior ICAEW member at the firm would report that misconduct to ICAEW. This duty can be delegated to someone else within the firm – that could be another member or a non-member – for example, an Ethics partner or HR representative.
“If a more junior ICAEW member was aware that the more senior principal in the organisation wasn't fulfilling their duty to report, they might need to make a report themselves,” says Professional Standards’ Senior Manager, Legal & Regulatory Counsel, Claire Phillips.
How do you make a report?
The updated guidance includes a new form that members can use when making a misconduct report. This form explains what information is needed to carry out an investigation, such as background on the misconduct, how you became aware of that misconduct, your involvement and what evidence is available to support the report.
“It might be incidences that have happened within a firm, but it might be that you've received correspondence from an ICAEW member and think that should be drawn to our attention,” Langridge explains. “It's difficult to say exactly what supporting evidence you will need to provide – that will depend on the type of conduct. In certain cases, it might just be a letter. In other instances, it might be a schedule of incorrectly claimed expenses. It could be working papers that have been completed incorrectly and evidence that shows why they're incorrect.”
Potential Confidentiality, GDPR and AML implications
When making a report, members should keep in mind any other ethical and legal obligations, which include client confidentiality requirements under the Code of Ethics, GDPR and anti-money laundering obligations. If you’re uncertain about the implications around GDPR in making a report, speak to the Information Commissioner’s Office for guidance.
With anti-money laundering, members should be aware of the requirement not to tip off any individuals that are the subject of a Suspicious Activity Report. This is covered in the guidance, but any members with doubts or concerns can use ICAEW’s technical helpline, which is completely confidential. More details can be found on the Technical and Ethics Support page on the ICAEW website.
Additional support for members
The guidance also includes details of additional support available for members, particularly if you have a disability or health problem that makes it more difficult for you to make the report. If the issue is particularly sensitive or emotionally difficult, members can request anonymity or confidentiality and ICAEW will take appropriate steps to ensure your identity is protected.
You can also reach out to the Chartered Accountants Benevolent Association (CABA). Like the ICAEW helpline, members working with CABA are exempt from the Duty to Report Misconduct.
“These are stressful situations, so if members need some sort of emotional or other technical support, they have several avenues,” says Phillips. “Technical advisory is offered on a confidential basis, so they have an exemption from the reporting duty, even if they're a member.”
If in doubt – report it
If you’re unsure as to whether to make a report or not, it’s best to make a report. “There's nothing to lose by making a report,” says Langridge. “If you make a report to us, and we don't think we have enough to pursue it, it doesn't mean nothing will happen. For example, it might form part of the information that the Quality Assurance Department uses when assessing who to visit. If more than one person makes a report against a particular firm, that might be enough for us to consider the issues further.”