Since the last update in January there have been three disciplinary tribunal findings, five Investigation Consent Orders and two Fixed penalties published.
In one of the disciplinary tribunal cases a member was excluded, fined £32,275 and required to pay costs following multiple and ongoing compliance failures:
- Not fulfilling assurances given on quality assurance monitoring visits;
- failing to notify all clients, in writing, of the name of the principal to be contacted if they wish to make a complaint and their right to complain to ICAEW;
- failing to notify all clients, in writing, of the basis on which fees would be rendered as required by paragraph 240.2b and / or paragraph R330.5 of The Code of Ethics;
- failing to comply with paragraph 7 of the Money Laundering Regulations 2007 as he did not apply customer due diligence measures on all clients;
- failing to comply with paragraph 27 of The Money Laundering, Terrorist Financing and Transfer of Funds (information on the payer) Regulations 2017 as he did not apply customer due diligence measures on all clients;
- failing to comply with paragraph 8 of the Money Laundering Regulations 2007 as he failed to conduct ongoing monitoring of the business relationships he had with all clients;
- breaching the Code of Ethics, in that he did not maintain professional knowledge and skill at the level required to ensure that clients receive competent professional service in accordance with section 130.1 and / or R113.1;
- failing to comply with Regulation 6 governing the use of the description ‘Chartered Accountants’, as his firm described itself as a firm of Chartered Accountants when not eligible to do so because a principal was not a member or affiliate member of ICAEW;
- filing dormant accounts for his firm when he knew that the company had been trading. In doing so he breached s150.1 of the Code of Ethics (effective 01 January 2011 to 31 December 2019) in that he knew or should have known that doing so may discredit the profession;
- failing to file Corporation Tax returns by the due date for his company. In doing so he breached s150.1 of the Code of Ethics (effective 01 January 2011 to 31 December 2019) in that he knew or should have known that doing so may discredit the profession; and
- failing to ensure that his company had sufficient distributable reserves to declare dividend distributions, contrary to Section 830 of the Companies Act 2006.
In another tribunal case a member was excluded, reprimanded, fined £7,000 and required to pay costs. He engaged in practice without a practising certificate for over 9 years, failed to ensure that he was supervised by an appropriate anti-money laundering supervisory authority for 13 years and failed to notify clients, in writing, of the name of the principal to be contacted if they wish to make a complaint and their right to complain to ICAEW, contrary to Disciplinary Byelaw 11.1.
In the third tribunal case published this month a provisional member was declared unfit to become a member and required to pay costs as a result of his convictions firstly for Committing an act outraging public decency, contrary to s. 320 of the Criminal Justice Act 2003
and in a second subsequent case two years later:
(i) Up-skirting contrary to the Voyeurism (Offences) Act 2019 and s.67A of the Sexual Offences Act 2003.
(ii) Breach of a Sexual Harm Prevention Order contrary to s.103A of the Sexual Offences Act 2003.
(iii) Breach of a Suspended Sentence Order contrary to Schedule 12 of the Criminal Justice Act 2003.
The following consent orders were made by the Investigation Committee:
A firm was severely reprimanded and fined £13,500 for failing to comply with Money Laundering Regulations in respect of failing to establish and maintain procedures for Customer Due Diligence, failing to monitor their compliance with the regulations and failing to fulfil assurances given in respect of AML compliance on a quality assurance monitoring visit.
That a member be reprimanded and fined £10,000 because he had:
- submitted or caused to be submitted self-assessment tax returns in respect of a client to HM Revenue & Customs for three years without obtaining the clients authority and/or approval;
- failed to inform that client of correspondence received from HMRC or obtain the client’s instructions; and
- failed to respond to the following communication from ICAEW’s Professional Conduct Department contrary to Disciplinary Bye-law 10.7 because he failed to cooperate promptly and in full with the Professional Conduct Department’s investigation.
Another member was severely reprimanded and fined £10,000 for a failure to exercise reasonable care, skill and diligence, in breach of section 174 of the Companies Act 2006 (General Duties of Directors) by allowing a client to not declare output tax in its VAT return on an invoice for the sale of intellectual property to a connected party.
A member was severely reprimanded and fined £7,000 because he was responsible for the preparation of the financial statements of a limited company client for three years when those financial statements had not been prepared in accordance with Generally Accepted Accounting Policy (GAAP). They incorrectly included assets and liabilities as if they were the company’s but which were personal assets and personal liabilities of the company directors and/or incorrectly included income and expenditure relating to assets that were not owned by the company. He was also responsible for the preparation of the Corporation Tax Returns of that same client for those same years when the financial statements included in the returns had not been prepared in accordance with Generally Accepted Accounting Policy (GAAP) as required by section 46 of the Corporation Tax Act 2009 because the profits and/or losses shown in those financial statements were derived from personal income and personal expenditure of the company directors.
Finally, a member was reprimanded and fined £2,100 because he and/or members of staff he was responsible for, failed to submit a clients Self Assessment Tax Return to HMRC.
Finally the two fixed penalty notices published this month both related to offences of drink driving
Further details can be found on our Disciplinary Database.