DEALING WITH DISCIPLINE
description
Transcript of DEALING WITH DISCIPLINE
DEALING WITH DISCIPLINE
Presented By
Roisin Bennett
Reddy Charlton
Solicitors
12 Fitzwilliam Place
Dublin 2
Tel: 353 1 661 9500
Fax: 353 1 678 9192
Email: [email protected]
Web: www.reddycharlton.ie
Outline
• Regulation of Accountants
• Overview of Disciplinary Process
• Disciplinary Committee
• Admissions and Licensing Committee
• Common Causes of Complaints
• New Areas of Complaint
Regulation of Accountants• Not regulated by statute• Various accountancy bodies within Ireland and
various regimes in operation• ACCA regulatory regime operated from London
ACCA created Regulatory Board in 2008
ACCA Regulatory Board
• ACCA Bye Laws• Code of Ethics and Conduct• Statutory Controls in Companies Acts and
IFSRA• International Standards on Auditing• ISQCs
ACCA Regulation
Purpose - Protection of the public
Overview of ACCA Regulatory ProcessDisciplinary Committee
Deals with specific breaches in bye laws
Imposes orders and fines on members/firms to show public how serious conduct was
Has power to exclude members
Admissions and Licensing Committee
Deals with defective work practices and procedures
Takes appropriate action for the future to protect public
Has power to withdraw practising certificate of member
Stage 1Investigation Stage
Stage 2Assessor Stage
Stage 3Referral to Disciplinary Committee
Stage 4Disciplinary Committee & Decision
Stage 5Appeals
Overview of ACCA
Regulatory Process
Sources of Complaints
• Clients
• Report from ODCE or Companies Office to ACCA
• Following an unsatisfactory monitoring visit from ACCA
Stage One - Investigation Stage• Investigating Officer is appointed• Correspondence issued• Treat complaint seriously• Co-operate with Investigating Officer• Respond in a timely manner and accurately• Take professional advice if required
Critical stage in the processAdmissions made at this stage often prove fatal
Stage Two - Assessor Stage• Assessor makes decision whether matter
should be referred to Disciplinary Committee or Admissions and Licensing Committee
• Assessor’s report is sent to member for comment and to allow member to make written representations
Important opportunity for member to engage and try to have matter dealt with
Stage 3 – Assessor’s decisionTo refer or not to refer?
Assessor can decide:• There is no case to answer• There is a case to answer and
the matter is referred to the Disciplinary Committee
• The matter can rest on file• The matter is referred to the
practice monitoring department
Stage 4 - Disciplinary Committee Hearing
• Independent of ACCA• 5-6 people on panel• Majority are non
accountants • Hearings are in public
and are recorded• Case presenter appears
for the ACCA
• Attendance is crucial• Shows you respect the
importance of the role of the committee
• Shows your commitment to your career and the profession
• Gives committee an opportunity to evaluate your appearance and general demeanour
Disciplinary Committee Hearing
To defend or not to defend?• This needs to be considered
carefully• Take advice on the merits of
defending• Increased costs in preparing for
defence of the case for member and ACCA
• If defence unsuccessful member responsible for both sets of costs
• The committee has no jurisdiction to award costs against ACCA
Has complaint been proven?
Have the facts been proven against the member?
Have the facts breached the relevant bye law referred to in the
complaint?
Pre Empting the Decision
• Review guideline disciplinary sanctions
• Consider what view committee likely to come to
• Package a set of proposals in mitigation– Highlight previous clear record
– Once off issue
– No loss to public
– Evidence of financial position
Previous History
• After plea in mitigation is made– Clerk will inform committee of any previous
disciplinary orders made against member– Committee come to their decision
Decision of Disciplinary Committee
• Orders– No further action– Admonishment– Reprimand– Severe Reprimand– Exclusion/Removal
from Register
• Fine• Costs and publicity
What happens next?
• Formal letter issues from disciplinary committee• Statement of written reasons follows
– This will include a form of application for permission to appeal
• There is a strict 30 day period for leave to appeal• Right to appeal is only permitted if the Chairman of
Appeals Committee grants leave to appeal
Stage 5 - Appeal Committee• Uphill battle• It is not a re hearing of the
matter• Must shows substantive
grounds of appeal• Only witnesses permitted will
be those with new evidence
Overview of ACCA Regulatory ProcessDisciplinary Committee
Deals with specific breaches in bye laws
Imposes orders and fines on members/firms to show public how serious conduct was
Has power to exclude members
Admissions and Licensing Committee
Deals with defective work practices and procedures
Takes appropriate action for the future to protect public
Has power to withdraw practising certificate of member
Admissions and Licensing Committee
• Complaints originate with Professional Conduct Department or Practice Monitoring Department
• Audit and insolvency work referred to Regulatory Assessor
Regulatory Assessor
• The Regulatory Assessor can:– Say no action is necessary– Impose conditions on holder of a certificate– Refer the case to the admissions and
licensing committee
• The Regulatory Assessor cannot withdraw or suspend a certificate.
Admissions and Licensing Committee Hearing
• Independent of ACCA
• Same format as disciplinary committee
• Hearings are in public and are recorded
Admissions and Licensing Committee
Formulate proposals showing:– How incident was a once
off or on one file– Plan for the future that this
will not happen again– Previous good record– How public are not at risk
Admissions and Licensing Committee
The following options are available:– No order– Order placing conditions on firms or
individuals certificates– Suspension or withdrawal of firm’s or
individual’s certificate or licence
Appeal from Admissions and Licensing
• Same format as appeal from disciplinary committee
• 30 day period for leave to appeal
• Most appeals are unsuccessful
Common Complaints Audit Work• Admissions and Licensing
– Deficiencies in audit work
• Disciplinary – Failure to report Indictable Offences Under Section
194(5) of the Companies Act 1990– Failure to make reports in respect of regulated
entities under Financial Services Acts
Common Complaints Deficiencies in Audit Work
• Usually very basic errors giving rise to problems
• Poor systems on pre planning, documenting and concluding audits
• Recognising the risk involved in audit work
• Recognising the risk with certain audit engagements
Common ComplaintsFailure to Report
Only arises when and only when:
• Auditor forms an opinion• During the course of an audit• That there are reasonable
grounds• That the company has
committed an indictable offence
Common Complaints Section 31 Companies Act 1990
• Member liable to disciplinary action for breach of fundamental principle of competence and care and misconduct for delay in filing a report with ODCE
• complex piece of legislation• Knowledge of directors no longer relevant• Guidance from ODCE says they are monitoring cases of
post July 2009 intercompany loans
Section 31
Held in this case that member had no case to answer
Is the offence an indictable one?
If not then no obligation to report
Common Complaints Reporting of Section 202 Offences
• Complaint from ODCE to ACCA• Auditor disciplined as a result of Section 202
Report because previous audit reports had been qualified but no report made to ODCE
• Complaint from ODCE sought to look back at earlier years
• Early intervention in this case resolved the matter
New Complaints Conflict of Interest Cases
• Growing number of complaints in this area• Signing audit report when ineligible to do so• These are treated very seriously by
Disciplinary Committee – guideline order is exclusion
New ComplaintsBreach of Undertaking
• Undertaking given to Practice Monitoring Department/Professional conduct department
• Undertaking not adhered to e.g. hot reviews
• Member/firm liable to disciplinary action• Treated very seriously by disciplinary
committee
New complaints Complaints by Liquidators
• This is a new area of complaint as a result of recession
• Obligation on auditor to furnish books and records to liquidator
• Complaint of no co-operation by auditor
New Complaints - Insolvency of Companies
• Reports by liquidators to ODCE where they uncover failure to report in previous years by auditors
• Fraudulent trading• Books and records• Non holding of EGMs
New Complaints - Insolvency
• In the UK a number of complaints arising where accoutant is acting in management of a creditor’s IVA
• Proposed Personal Insolvency Bill
• Role of accountant as personal trustee
• Liabilities of personal trustee
Summary
• Post celtic tiger now living in a regime of increased regulation
• More demands being put on professionals
• Business is down• Important not to compromise standards
as a result
Summary
• If faced with a complaint take advice immediately
• A problem shared is a problem halved
• Formulate a solution
• Procrastination makes things worse
Tel: (01) 6619500 Email:[email protected]
DisclaimerThis information is for guidance purposes only. It does not constitute legal or professional advice. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. No liability is accepted by Reddy Charlton for any action taken in reliance on the information contained herein. Any and all information is subject to change.