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Disciplinary update: for January 2022 newsletter

Author: ICAEW

Published: 12 Jan 2022

Since the last disciplinary update, one appeal committee order has been published, as well as nine tribunal findings, eight consent orders (issued by the Investigation Committee) and six fixed penalties.

An appeal was dismissed in a case where the member had been excluded from membership, fined £10,000 and required to pay costs because in his role as a trustee he:

  • personally used trust funds that he should have distributed;
  • failed to distribute funds in a reasonable time; and
  • received a loan from a client.

He was also required to pay the costs of the appeal.

A tribunal excluded a member, fined him £10,000 and required a contribution to costs following:

  • his conviction for dishonest conduct in Gibraltar;
  • his failure to notify ICAEW of his conviction; and
  • his failure to declare that conviction when applying for readmission.

In other tribunal cases a member used a helpline quoting a name and policy number relating to her former employer for over a year after she had left their employment. The tribunal found this to be a serious and repeated course of dishonesty and excluded her from membership. She was also required to pay costs.

A member was held to have failed to co-operate with the head of staff in that he failed to provide the information and documents requested of him after appearing before the Disciplinary Committee This was a breach under Disciplinary Bye-law 10.7.

He was excluded and required to pay costs.

Another member was excluded from membership and required to pay costs for breaches of:

  • Regulation 10 of the Client’s Money Regulations as he received clients’ money totalling £267,083.69 which was paid into his firm’s office account and not immediately paid into a client bank account or to the client.
  • Regulation 13 of the Clients’ Money Regulations as on two occasions he failed to ensure that where money in relation to any one client in excess of £10,000 was held for more than 30 days the money was paid into a separate designated bank account for that client.
  • Regulation 7 of The Money Laundering Regulations 2007 in that he did not carry out and document customer due diligence and risk assessments on all clients.
  • And for preparing two years financial statements for the same client that did not comply with FRC102 and contained a true and fair opinion when no audit had been conducted.

Two separate cases against the same Insolvency Practitioner were dealt with by a tribunal who excluded him on both occasions. In the first case there were multiple compliance failures in his capacity as a liquidator of a company and in the other case there were eight different failures to provide information required under Disciplinary Bye Law 13. On this occasion as well as the exclusion and requirement to pay costs a fine of £15,000 was also imposed.

A member was excluded and required to pay costs following his conviction for offences of making indecent images of children and for possessing a prohibited image of a child.

Finally for tribunal decisions in two unconnected cases a failure to provide information required under Disciplinary Bye Law 13 were considered. In one case a member was severely reprimanded, fined £3,000 and required to pay costs while in the other another member was reprimanded and fined £700.

The Investigation Committee made orders by consent in the following cases:

A severe reprimand and £16,000 fine for a member who was found not to have exercised sound judgement in his reviews of VAT returns prepared by his staff for a client resulting in errors in for six consecutive quarters. He also failed to comply with Disciplinary Bye Law 11 by failing to notify his client in writing of the of the name of the principal to be contacted if they wish to make a complaint and their right to complain to ICAEW. He also failed to notify their client, in writing, of the basis on which fees would be rendered as required by paragraph 240.2b of The Code of Ethics.

A severe reprimand and fine of £10,500 were issued to a firm for the provision of incorrect advice to a client in respect of his residence status, on six separate occasions.

A severe reprimand and fine of £3,500 were issued to a member who signed an audit report on the financial statements of a client when he was ineligible to act as a statutory auditor because he was not approved as a statutory auditor in accordance with Part 27 of the Companies Act 2014 of Ireland (as amended) and/or Audit Regulation 4.05.

A severe reprimand and a fine of £3,150 were issued to a member who failed to comply with regulation 10 of the Clients’ Money Regulations in that he allowed his firm to receive clients’ monies of £63,256.91 which were not immediately paid into a client bank account.

A severe reprimand and £1,400 fine were issued for failing to fulfil an assurance given to ICAEW’s Quality Assurance Department to make appropriate changes to his firms anti-money laundering procedures to ensure compliance with the Money Laundering Regulations, specifically in relation to Client Due Diligence and risk assessments.

A severe reprimand was issued to a member in Hong Kong following a finding of fact by the HKICPA that he had breached Hong Kong Stock Exchange Listing Rules.

A reprimand and fine of £1,190 were issued where a member engaged in practice without a practising certificate and failed to have a money laundering supervisor for a period of two and a half years.

A reprimand, fine of £700 for a member breaching Client Money Regulation 13 by holding more than £10,000 of each of three different clients' money in his general client money bank account for periods ranging from six weeks to almost two years.

Each of the above consent orders came with a requirement to pay costs.

Finally fixed penalties were issued in six separate cases. Three were for drink driving convictions, two for the use of the description ‘Chartered Accountants’ when not entitled to do so, and lastly one for engaging in public practice, contrary to regulation 20 of the ACA student regulations.

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