What actions can the ICAEW take? Retired accountant disciplined by ICAEW
What actions can the Institute of Chartered Accountants in England and Wales (ICAEW) take? We look at a case where we represented a retired accountant who just received a reprimand.
Blake Morgan were instructed late on this particular case, which had already been referred to the Disciplinary Committee and had been adjourned to enable our client to obtain some independent legal advice.
The case
Our first task was to establish the basis of any defence to the complaints, as this was far from clear on any reading of the exchanges of emails during the course of the investigation.
This turned out to be a lengthy process. Eventually, we had enough information to enable a decision to be made on a possible defence to the complaints.
The complaints
For some of the complaints regarding the preparation of accounts there was no defence. Our advice was, reluctantly, accepted namely that in respect of these complaints, they would have to be admitted.
In relation to the remaining complaints concerning the preparation of tax returns, we identified certain defence issues. A defence was lodged.
ICAEW actions
The regulator, the ICAEW, was invited to offer no evidence on these remaining complaints. The other complaints being admitted would have resulted in a straightforward sanctions hearing. However, no concessions were agreed.
The Professional Conduct Department then served a witness statement prepared by a chartered accountant employed by the Institute. This seems to be a recent change. Previously, the Institute would engage a third-party expert, not within its employment. Of course, the new system cuts the costs to be incurred.
We warned our client about the cost of a contested hearing. There was the risk that whilst aspects of the defence were sound, if the defence failed, our client would have to bear the entire costs incurred by both prosecution and defence. The ICAEW costs were likely to be not far short of £30,000.
We also identified weaknesses in the defence for one of the complaints, but took the view that the defence on the other complaint was sound.
We proposed to the Professional Conduct Department that if our client was to drop his defence on the first complaint, the Institute might accept the defence on the second, which would mean that the parties would need to prepare for a sanctions hearing, as opposed to a contested hearing which would last one instead of two days. Overall, costs for both parties would be reduced in the event our proposal was accepted. However, this meant a late change in plea. Often a plea in mitigation includes the fact that the defendant has admitted the complaints at an early stage, thereby displaying insight. This argument was not available to our client.
Conclusion
Our client had not been paid by their client and had clearly, like others, been greatly misled by his client, so he was warned of the possibility of a severe reprimand and a hefty fine. The costs payable to the Institute were unavoidable.
In the event, the Disciplinary Committee decided to look favourably on our client, now retired from practice after many years in the profession. He was reprimanded and fined £1,000.
If you are unsure what actions the ICAEW, or other regulators, can take against you, contact our Accountants Defence team for legal advice.
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