AML: HMRC flexes enforcement muscle to the tune of £7.8 million
Two recent decisions of the ICAEW Disciplinary Committee highlight the seriousness of allegations involving dishonesty and, in particular, financial impropriety.
The first case relates to Mr A, who was the Group Accountant of ‘B’ Ltd. ‘B’ Ltd handled large amounts of petty cash, which was held in a safe under the control of the assistant accountant. To make cash withdrawals, a petty cash voucher, signed by the recipient, was required.
Mr A made several withdrawals from the petty cash when the assistant accountant was not in the office, putting an “on account” petty cash voucher into the petty cash. At the time Mr A was challenged about the withdrawals from the petty cash, the amount withdrawn was almost £16,000. Rather than repay the money, Mr A amended the management accounts in order to conceal the withdrawals. He continued to withdraw money until his employment was terminated in April 2015. In total, Mr A withdrew £30,250 from his employer without permission, which he later repaid. The matter was subsequently referred to ICAEW’s Disciplinary Committee.
The ICAEW Disciplinary Committee found that Mr A had dishonestly taken monies from his employer for his personal benefit when he should have known that he did not have the authority to do so. The ICAEW Disciplinary Committee took in to account the fact that Mr A had been suffering from a gambling addiction at the time of the misconduct. They also had regard to his previous good record, the fact he had repaid the money and that no clients had suffered as a result of his actions. However the ICAEW Disciplinary Committee found that he had abused his position of trust and he was excluded from membership.
The second case relates to Mr P, who had pleaded guilty in the Crown Court to fraud by abuse of position. Mr P had fraudulently transferred £45,000 from the bank account of a company, of which he was the sole signatory, to a bank account that he personally controlled. The matter was referred to the ICAEW Disciplinary Committee who found the complaint proved based on Mr P’s guilty plea.
The ICAEW Disciplinary Committee excluded Mr P from membership on the basis that he had brought discredit on himself, ICAEW and the profession of accountancy by abusing his position as a Chartered Accountant. Although Mr P had a clean disciplinary record, the ICAEW Disciplinary Committee had regard to the fact that Mr P’s actions had caused the company to go in to liquidation. They also found that Mr P had shown no remorse or insight.
In both cases, the ICAEW Disciplinary Committee found that the dishonest conduct was such a serious breach of trust that Mr A and Mr P were not fit to be chartered accountants. These cases highlight that the integrity of a chartered accountant is fundamental to the confidence with which the public hold the profession.
Both cases provide an important reminder that regulators take a hard line approach in respect of dishonest conduct. In particular, Mr A’s case shows that even in light of considerable mitigation, the serious nature of dishonest conduct is likely to outweigh any explanatory features or attempts to repair the damage.
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