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Investigation Committee: avoiding the risk of referral

Author: ICAEW

Published: 30 Mar 2021

No one wants to receive a complaint about their professional conduct, let alone have their case end up in front of ICAEW’s Investigation Committee (IC). We talk to Paul Brooks, the Committee’s Chair, about how members and firms can engage more effectively with the process, as well as how best to avoid a referral in the first place.

“The IC is where it all comes together in terms of complaints against members and member firms,” explains Chair Paul Brooks. “As a consequence, we see absolutely everything from complaints against individual members, through sole practitioners to the Big Four firms.” 

The complaints cover a wide range of issues, which fall into three broad categories:

  • the respondent has brought themselves, ICAEW or the profession into discredit;
  • matters of professional incompetence – what the respondent has done is not up to the standards expected of a competent Chartered Accountant; and
  • breaches of regulations, which tend to be strict liability cases.

Despite its name, the IC doesn’t actually investigate anything, explains Brooks. It’s the Professional Conduct team (PCD) that does the investigation and produces a report, which details the complaint and the evidence. This report then comes to the IC. “It is also shared with the member or member firm before it comes to us,” says Brooks. “And they are entitled and encouraged to engage and respond to the report.”

“One of the things we find is that often members have not engaged in the process – so when it comes to us, we’ve only really got the ICAEW’s case,” he explains. “Or they may have responded earlier in the process but haven’t, for example, given any final response to the PCD’s report, including recommendations being made by the case manager.”

Engage in the process

By better engaging in the investigation process, responding to the final report and addressing the issues explicitly, respondents can make a significant difference to the eventual outcome.

“We spend a lot of time trying to assess whether the respondent has fully admitted to a complaint or not,” says Brooks. Sometimes people may admit the facts but then don’t make it clear whether they accept that whatever they have done brings discredit, amounts to incompetence or breaches a regulation.

This aspect is important because if the IC decides there is a case to answer, it can offer a consent order consisting of financial and non-financial sanctions. In determining these, the IC follows ICAEW’s Guidance on Sanctions, which allow it to consider any aggravating and mitigating factors. It can also offer a discount of up to 30% of the final financial penalty if the respondent admits a complaint in full (the facts and that it brings discredit, or amounts to incompetence or a regulatory breach).

“If they say, I accept the complaint,  but there is mitigation, we can take that into account in arriving at the appropriate sanction” Brooks explains. “That can result in a significant reduction in the proposed financial penalty. Equally, if they don’t accept the complaint, the clearer the member or firm can be in explaining why, the easier it is for the Committee to consider their defence.”

If in doubt

The value of addressing difficult issues head on and not sticking your head in the sand is relevant further back in the process too. “A lot of complaints could be avoided if the ICAEW member or firm, when in any doubt, had consulted ICAEW and taken and followed advice, certainly in terms of regulatory and ethical matters,” stresses Brooks.

“Sometimes people just don’t think of ringing ICAEW’s Technical Advisory Service helpline and saying: ‘I’ve got this situation – I’m not sure which way to deal with it. What’s your advice?’ But if they did that, they would avoid get themselves into trouble,” he adds. 

In too many cases, the Committee finds that the member or firm has failed to take advice and simply assumed that what they were doing was the right thing. “And yet when it’s not, it catches up with them, and a complaint is brought,” says Brooks. “A lot of people could avoid that by just taking advice in the first place. And ICAEW is very good at providing advice."

Sort it out early

Brooks also highlights how visits from the Quality Assurance team (QAD) can offer the ideal opportunity to improve practices and procedures, and address any problems in the making. “Too often we’re dealing with complaints where an issue has been identified at a QAD visit,” he says. “The member or firm has given assurances that they will put it right. And then at the following visit, it’s discovered they haven’t done what they were supposed to do.”

“Not only have you not sorted the problem out but it becomes significantly more serious because you’ve breached the assurance you’ve given to your regulator,” explains Brooks. “We see quite a lot of complaints that fall into that category.”

If members and firms took advice whenever they’re uncertain and corrected issues brought to their attention in a QAD visit, Brooks believes many complaints would just fall away. “They’d never get to us, because there’s nothing to complain about if you’ve got it right or promptly corrected a failing.”

“The biggest single message,” he says, “is if you get it right in the first place, you can avoid any danger of going down the disciplinary route. There is lots of advice available so, if in doubt, take advice and if something’s brought to your attention in a QAD visit, sort it out there and then.”

Further resources

  • IC role and function

    The Investigation Committee’s (IC) role is to consider complaints against members, firms and ACA students across a wide range of matters. Complaints are referred to the IC after an investigation by the Professional Conduct team (PCD).

    The IC considers the complaint and all the submitted evidence, including written representations from the respondent and complainant, to decide whether there is a case to answer.

    If the IC decides there is a prima facie case, it can offer financial and non-financial sanctions, including reprimands, fines and costs, or, in the most serious cases, refer the case to the Disciplinary Committee.  Irrespective of the decision the IC makes, the member or member firm always has the right to have their case heard by the Disciplinary Committee.

    The IC consists of 22 members, of which at least half must be non-accountants. It meets monthly, and considers about 20 cases at each meeting. Respondents and complainants do not appear at the meetings; everything is considered on the basis of the papers provided.

    Before the pandemic, the IC met in person as a single committee in Chartered Accountants’ Hall in London. It currently meets online and splits members into two groups – a morning and afternoon group, with the agenda divided between the two.

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