A practitioner has been severely reprimanded and will have to pay a fine of £5,000 and the full costs of the tribunal of £5,669.50 after repeatedly failing to provide information following Institute of Chartered Accountants in England and Wales' (ICAEW's) desktop review of his firm.
According to June’s ICAEW disciplinary report, C failed to respond to the closing record of the review and subsequent email reminders in 2016. Both the Practice Assurance Committee (PAC) and the Professional Conduct Department (PCD) of ICAEW were informed of the situation and the PCD wrote to C in 2017.
When he finally sent a reply, C didn’t provide all the information that was asked from him. He was then asked to provide further details, relating to the way the firm dealt with client money.
After more chasing correspondence and another request from the PAC, C responded by only partially providing the information that was required from him.
C failed to provide evidence of an internal client money compliance review, confirmation of whether the firm’s clients’ money account was interest-bearing, whether the bank charges on the client account were being deducted from the office account and also failed to provide the basis of the minimum requirement of £50 to maintain the client account.
In March 2019, C wrote to tell ICAEW that he was closing his firm and that he wished to resign his membership. He was informed that his membership would be maintained pending the conclusion of the complaint.
Besides a fine of £5,000, the tribunal decided C would have to pay costs of £5,669.50 and provide the information requested within seven weeks.
Chris Cope comments
We do not know of C’s age, but the report states that he has been a member since 1977. He must therefore he in his late 60s. In March 2019, C advised the Institute that he was closing his practice, an indication that he was retiring. He would, upon retirement, require six years’ run-off cover to protect against any future claims. The hearing took place in March 2020, by which time one would imagine that the run-off cover policy would be in place. A finding of a Disciplinary Committee must be disclosed to insurers, whether the practice continues or has closed. A failure to disclose a disciplinary record could result in the insurers avoiding future liability.
I also note that C failed to pay the fine and costs which meant his membership has ceased. Inevitably, the Institute will pursue payment. Court proceedings seeking the sum of £10,669.50 plus interest seem inevitable.
A second practitioner also ran into trouble after failing to provide information – in this case, for ignoring various requests for documents to evaluate his conduct as executor of an estate and trustee of two trusts.
W requested additional time to respond, indicating he was feeling overwhelmed but that he wanted to assist and provide the information.
However, W didn’t reply before the new deadline and, after that, he also failed to engage in the ICAEW’s tribunal process up until the date of the hearing.
W later explained that, as he was coming to the end of his years in practice, he was finding it increasingly difficult to continue to deal with the day to day demands of the job. He showed remorse for not responding to the correspondence and not engaging in the proceedings.
The tribunal considered that the lack of response was serious, but it took into account W’s financial circumstances and his remorse, which reduced the sanctions to a reprimand and a financial penalty of £2,000 that W will have to pay alongside the full costs of £4,776.50.
Chris Cope comments
At least W attended the hearing and paid the fine and costs, thereby securing his future membership.
Although we do not know the age of W or his date of admission to membership, he advised the tribunal that he was coming to the end of his years in practice.
There is therefore, to that extent, a similarity in these two cases: both members nearing retirement.
What is apparent from the facts reported is that both members needed support, ie from the Institute’s Support Members Group, or, possibly, from the Chartered Accountants’ Benevolent Association. In bygone days, a visit from the local District Society could have been arranged. Sometimes a helping hand is more appropriate than wielding the big stick.
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