The Disciplinary tribunal recently excluded a member and required him to pay costs following action taken by the Chartered Institute of Taxation (CIT) to exclude him from their membership. He was excluded from the CIT for dishonestly preparing and submitting Self-Assessment Tax Returns on behalf of his clients. The tax returns included claims for Enterprise Investment Scheme and Seed Enterprise Investment Scheme relief, which he knew were not available to those clients. He also prepared and submitted VAT returns for clients that deliberately understated the VAT liability and he asked for a VAT registration to be back-dated, despite knowing his client had been raising VAT invoices for at least seven months.
A member was excluded, fined £2,500 and required to pay costs after he e-mailed documents to his personal e-mail address from his work e-mail address, when he knew or should have known that he should not have done so. In doing so he breached section 110 of the Code of Ethics, namely integrity.
Another member was excluded from membership and required to pay costs after being convicted on his own admission of two counts of fraud by abuse of position, contrary to Sections 1 and 4 of the Fraud Act 2006, and one count of making an article for use in fraud, contrary to Section 7 of the Fraud Act 2006.
A member was severely reprimanded, fined £5,000 and required to pay costs for failing to respond to a formal demand for information issued under Disciplinary Bye Law (DBL) 13. He was also ordered to comply with the DBL 13 request within 28 days.
A firm was severely reprimanded, fined a total of £20,000 and required to pay costs in respect of three compliance issues:
- Undertaking regulated activities which (a) were not incidental to the provision of other professional services in breach of Regulation 3.08 of the DPB (Investment Business) Handbook; and/or (b) did not arise from or were complementary to other professional services which were provided at the time to clients, in breach of Regulation 3.09 of the DPB (Investment Business) Handbook.
- Submitting inaccurate annual returns to ICAEW.
- Failing to submit the results of its external DPB compliance review to ICAEW, as directed by the Investment Business Committee.
A member and his firm were both severely reprimanded, the member fined £7,000 and both member and firm were required to pay costs as a result of a large number of compliance failures relating to Money Laundering Regulations and Clients’ Money Regulations including:
- Providing a banking facility through its clients’ money bank account, processing transactions that did not relate to accountancy services being provided, contrary to regulation 8A of ICAEW Clients’ Money Regulations.
- Failing to comply with Regulation 7(3)(b) of the Money Laundering Regulations 2017 in that the firm failed to demonstrate to its supervisory body that the extent of the client due diligence measures undertaken in this period were appropriate.
- Incorrectly completing annual returns for the firm stating that the firm had complied with the requirements of the relevant money laundering legislation when it had not.
In addition the member was found to have lacked objectivity in relation to outstanding fees and loans and he also completed inaccurate tax returns.
A member was reprimanded, fined £3,500 and required to pay costs for issuing unqualified audit reports for 5 years accounts when in relation to donations received, cash at bank and grants payable, he failed to:
- Plan and perform the audit with an attitude of professional scepticism in breach of ISA200 ‘Objective and general principles governing an audit’ in that he failed to approach the information that he was provided with a questioning mind and/or to make a critical assessment of that information; and/or
- Obtain sufficient appropriate audit evidence, in breach of ISA 500 ‘Audit evidence.’
A number of consent orders were accepted and issued by the Investigation Committee in relation to a wide variety of conduct matters:
A member was severely reprimanded, fined £7,200 and required to pay costs for failing to comply with Money Laundering Regulations 2017 as he failed to document risk assessments and client due diligence for all clients and for failing to comply with Clients’ Money Regulations as he failed to obtain a bank letter acknowledging trust status of the client account.
A member was reprimanded, fined £350 and required to pay costs in respect of failing to ensure that an AML supervisor had been appointed for her firm in breach of the Money Laundering Regulations 2017.
Another member was severely reprimanded, fined £5,000 and required to pay costs in relation to filing dormant accounts for two companies when he knew they had been trading, failing to include transactions in one of those companies accounts and under declaring dividends in an individual’s tax returns for three years when they had received them from this company.
A member firm was reprimanded, fined £3,500 and required to pay costs for preparing:
- 60 sets of dormant statutory accounts, for 19 companies in which the directors claimed exemption from audit, when the companies’ Articles of Association required that the correctness of the Income and Expenditure account and Balance Sheet be ascertained by a properly qualified Auditor.
- 2 sets of dormant statutory accounts in which the directors claimed exemption from audit when the companies’ Articles of Association required the auditors to make a report to the members on the accounts examined by them.
- 2 sets of dormant accounts for the two companies, in which the directors claimed exemption from audit when the companies’ Articles of Association required the balance sheet presented to the Annual General Meeting to be accompanied by a report from the Auditors.
An ICAEW licensed insolvency practitioner was severely reprimanded, fined £12,500 and required to pay costs in respect of failing to:
Another ICAEW licensed insolvency practitioner was reprimanded, fined £1,250 and required to pay costs because, when acting as a liquidator, he failed to adequately disclose the sale of certain assets to a connected party in the report to creditors contrary to Paragraph 6 of Statement of Insolvency Practice 13.
A member was reprimanded and required to pay costs following their entry into an Individual Voluntary Arrangement.
Six fixed penalties have been issued including two severe reprimands, one for driving a motor vehicle in a public place after consuming so much alcohol that he exceeded the prescribed limit and another for entering a compulsory ticket area on Transport for London regional railway network without a valid ticket
Three others were each reprimanded and given a fixed penalty of £700, for engaging in public practice without a practising certificate.
Finally a member firm accepted a fixed penalty that they be reprimanded and given a fixed penalty of £779 for using the description Chartered Accountants when they were not entitled to do so.