Members of professional accountancy bodies are expected to comply with the relevant standards of professional conduct and adhere to rules and regulations. In becoming a member, one agrees to be subject to the disciplinary processes that the body has in place to ensure compliance. Each professional body has its own disciplinary procedure, although most adopt a similar approach.
These frequently asked questions aim to answer some of the common queries asked by members of accountancy bodies when they are faced with a disciplinary investigation by the following regulators:
- Institute of Chartered Accountants in England and Wales (ICAEW);
- Association of Chartered Certified Accountants (ACCA);
- Chartered Institute of Public Finance Accountants (CIPFA);
- Chartered Institute of Management Accountants (CIMA);
- Institute of Chartered Accountants of Scotland (ICAS); and
- Association of Accounting Technicians (AAT).
The answers provided do not incorporate specific nuances of individual cases. If you are facing a disciplinary investigation by your regulator, it is important to seek tailored advice at the earliest opportunity. This will ensure the best possible outcome in the circumstances.
Questions concerning complaints
WHO CAN COMPLAIN ABOUT ME?
Anyone can make a complaint to a relevant professional body. However the nature of the complaint must be something that the particular professional body is able to consider. Professional bodies can instigate a complaint of their own volition if information comes to their attention, for example through the press or from another regulator.
What sort of complaints do professional bodies investigate?
Accountancy bodies investigate a wide range of complaints, ranging from breaches of regulations to lack of competence. Complaints are not just made about the provision of professional accountancy services but can extend to complaints about a member’s conduct in his/her personal life. For example, the ACCA will conduct investigations if a member has a criminal conviction or if they have failed to pay a judgment debt within two months without reasonable excuse. If you are faced with this situation, it is important that you seek advice from a specialist ACCA lawyer. If the complaint engages the professional body’s code of ethics it is likely to be considered. Professional bodies want to make sure that members’ conduct does not bring the profession into disrepute.
Do I need to refer concerns about my own conduct to my regulator?
Professional bodies impose duties on their members to report breaches. For example, Rule 10(b) of the ACCA Rulebook 2017 places an obligation on members to bring any matters which indicate that a member or member firm may be liable to disciplinary action to the attention of the Secretary, including matters relating to himself/herself. Likewise under ICAEW’s Bye-law 9.1 and 9.2 there is a duty for every member to report any matters where a member may be liable to disciplinary action where it is in the public interest to do so, and this includes members reporting their own conduct. Self-reporting is encouraged and is often seen favourably by the professional bodies. We have expertise in advising accountants prior to and during FRC investigations, ACCA investigations and ICAEW investigations and in some cases a candid approach can close down an investigation early.
Questions concerning the investigation stage
How long does the process take?
The length of a disciplinary investigation will depend on the nature and complexity of the case, how strongly contested the complaint is and which professional body is involved. In 2016 the average ACCA investigation took 3.8 months before it was closed. On the other hand, some ICAEW investigations took considerably longer. The AAT and ICAS aims to conclude cases within 6 to 12 months. Disciplinary investigations can, unfortunately, take some time to conclude, with some taking several years, particularly if the complaint proceeds to a full disciplinary committee hearing.
What does the investigation involve?
You will normally be advised that a complaint has been made about you and you will be provided with the contact details of the case manager responsible for investigating the complaint. You should be provided with a copy of the complaint.
The case manager is likely to ask you to respond to some questions or to provide documents, and you will normally be given a deadline to respond. Once the case manager has considered your response, they may ask you to provide further information/ documentation. This process will continue until the case manager has all of the information they need. Depending on the nature of the allegation, this process can last for anything from a few months to several years.
Can the regulator stop me working while the investigation is on-going?
Some regulatory bodies can impose interim orders on their members to suspend them from working for a prescribed period of time. The ACCA and ICAS can impose interim orders and the ICAEW may also serve a notice suspending a member from specified activities for a specified period.
Am I required to provide documents/information?
Most disciplinary schemes require you to cooperate with the investigation and to provide any documents requested. Failure to cooperate can result in the regulator bringing a further complaint against you. There may be some exceptions in relation to privileged, confidential or self-incriminatory documents. If you are facing an ACCA disciplinary, an ICAEW disciplinary hearing or FRC investigation and are not sure whether information can/should be provided you should seek advice.
What happens once an investigation is complete?
Typically, a decision is made whether to dismiss the complaint altogether or refer the complaint to an investigation committee or an assessor for the matter to be considered. In 2016, 100 out of 667 complaints made to the ACCA were closed after the initial review and 407 were closed following an investigation. As for complaints to the AAT, 44% of them were closed with no formal action or with informal advice being given.
If the matter is to be considered by an investigation committee or assessor, the case manager will normally prepare a report which will set out the background to the matter and will append the documentation obtained during the course of the investigation. You will have an opportunity to review the report and provide representations before it is considered by a committee.
At the investigation stage, committees normally meet in private and consider the complaint based on the papers. You will therefore not have an opportunity to attend the committee meeting.
What outcomes are available at the investigation stage?
The outcomes available at the close of the investigation stage differ between regulators. However, at the investigation stage, the committee/ assessor can normally:
- dismiss the complaint;
- order further investigations to be carried out;
- order that the allegations should rest on the member’s file;
- offer a sanction; or
- refer the complaint for a full hearing.
The committee often has the power to make a costs award against you, therefore you may be asked to contribute to the costs of the regulator’s investigation.
The sanctions available to committees at the investigation stage are normally less serious than those that can be imposed at a full disciplinary hearing. Some of the sanctions include admonishment, reprimand, severe reprimand and a fine.
The above list of sanctions is indicative only and, if a complaint is made against you, we recommend obtaining professional advice before the investigation process is completed. Often cases can be dealt with at the end of the investigation stage, with a lesser sanction, if a comprehensive response is prepared, taking into account any legal arguments which can be advanced.
Sanctions may vary depending on whether you are a member, member firm, associated member, student member etc.
If you do not wish to accept a sanction at the investigatory stage, the matter will normally proceed to a full disciplinary hearing.
Are the investigation stage decisions made public?
If you accept a sanction at the investigatory stage, the decision will normally be published unless the relevant committee exercises its discretion not to publish. If the complaint is dismissed by the committee, the decision may not be published.
Questions about a Disciplinary Hearing
WHEN WILL I BE NOTIFIED OF THE HEARING?
Members will be notified of the date, time and location of the hearing. Below are the relevant notice periods for the professional bodies:
- ICAS, AAT and ACCA disciplinary hearing: 28 days before
- CIMA hearing: 35 days before
- CIPFA hearing: 42 days before
- ICAEW disciplinary hearing: 42 days before the hearing unless the member has previously failed to comply with a notice served by the Investigating Committee, in which case the member will be given only 21 days’ notice of the hearing.
You will be provided with a copy of the complaint against you and the documents the regulator intends to rely upon at the hearing.
Do I need to attend the hearing?
You are not required to attend the hearing, however a decision can be made in your absence.
What evidence can I bring to the hearing?
You can rely on witness statements, documents or other evidence at the hearing. As it is the regulator’s role to prosecute the charge against you, they are unlikely to present evidence which is in support of your defence. It is therefore important that you submit any documents or other evidence that supports your case.
You can also give oral evidence at the hearing, although you are not required to do so, and you can ask witnesses to attend to give evidence on your behalf. If you or any witnesses do give oral evidence, then you may be questioned by the regulator’s representative and the panel.
If you intend to rely on documents or witnesses at the hearing you are normally required to give sufficient notice of this to the regulator in advance of the hearing.
Are hearings public or private?
The professional bodies usually make the hearings open to the public unless the tribunal considers that there are special reasons why the matter should be heard in private.
Who will be on the panel
The panel will normally be composed of a mix of accountants and lay people. The panel will usually have a legal advisor to advise it on matters of law and procedure.
How are decisions made at the final hearing?
The civil standard of proof applies i.e. the tribunal considers whether, on the balance of probabilities, the allegation is proved.
What sanctions can be imposed at the disciplinary hearing stage?
The sanctions available will depend upon your regulator, however the following are normally available to the disciplinary committee:
- severe reprimand;
- conditions imposed on your membership;
- suspension or withdrawal of a practising certificate;
- suspension or exclusion from membership.
The committee may also have the power to make a costs award against you, therefore you may be required to contribute to the regulator’s costs involved in the investigation and prosecution of the complaint. Some disciplinary schemes allow you to make an application for your costs to be paid by the regulator, however in practice such applications are rarely successful.
Can I appeal?
Yes, all of the professional bodies provide their members with the opportunity to appeal decisions, however there is often certain criteria that needs to be satisfied before an appeal will be allowed.
The relevant time limits for appeals are set out below:
- AAT: 14 days from notification of the decision
- ICAS, ACCA and CIPFA: 21 days from notification of the decision
- CIMA and ICAEW: 28 days from notification of the decision
IS THE DECISION OF THE DISCIPLINARY HEARING MADE PUBLIC?
Yes, decisions are typically published on the professional body’s website as soon as practicable after the hearing. This is usually after the time period for appeal has expired. The decision may also be published in the membership magazine for the body.