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: rbennett@reddycharlton.ie
Web: www.reddycharlton.ie
Outline
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Regulation of Accountants
Overview of Disciplinary Process
Disciplinary Committee
Admissions and Licensing Committee
Common Causes of Complaints
New Areas of Complaint
Regulation of Accountants
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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 Process
Disciplinary Committee
Admissions and Licensing
Committee
Deals with specific breaches in
bye laws
Deals with defective work
practices and procedures
Imposes orders and fines on
members/firms to show public
how serious conduct was
Takes appropriate action for the
future to protect public
Has power to exclude members
Has power to withdraw practising
certificate of member
Stage 1
Investigation Stage
Overview of
ACCA
Regulatory
Process
Stage 2
Assessor Stage
Stage 3
Referral to Disciplinary Committee
Stage 4
Disciplinary Committee & Decision
Stage 5
Appeals
Sources of Complaints
• Clients
• Report from ODCE or Companies Office
to ACCA
• Following an unsatisfactory monitoring
visit from ACCA
Stage One - Investigation Stage
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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 process
Admissions 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 decision
To 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
Disciplinary Committee Hearing
• 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
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
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Highlight previous clear record
Once off issue
No loss to public
Evidence of financial position
Previous History
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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
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No further action
Admonishment
Reprimand
Severe Reprimand
Exclusion/Removal
from Register
• Fine
• Costs and publicity
What happens next?
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Formal letter issues from disciplinary committee
Statement of written reasons follows
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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 Process
Disciplinary Committee
Admissions and Licensing
Committee
Deals with specific breaches in
bye laws
Deals with defective work
practices and procedures
Imposes orders and fines on
members/firms to show public
how serious conduct was
Takes appropriate action for the
future to protect public
Has power to exclude members
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 Complaints
Failure 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
Is the offence an indictable one?
If not then no obligation to report
Held in this case that member had no case to answer
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 Complaints
Breach 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 cooperation 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:rbennett@reddycharlton.ie
Disclaimer
This 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.