Tricky ethical point

Definitely a difficult one!

If I ever lose a client, they tend not to be big on communication anyway and the fact that 'someone in the pub's' accountant can save them more tax is all that they hear.

The clients that would expect me to warn them, are not usually the type that would leave.

Unfortunately, these clients are being drawn away by the attachment to a previous member of staff, so could be either/both. It is probably that staff member's responsibility to point out to them what they doing.

It would be nice to be able to put in your request for clearance 'I have received a request to pass your affairs across to Mr X, who was struck off the ICAEW register in 200X. Due to these circumstances, please sign the statement below to indicate clearance to hand over your tax affairs and please sign the second statement to show that you understand that Mr X has been struck off.

Now whether the ethical bods would allow this, is another matter. . . .

There is a more fundemental issue you should consider first. You refer to a "conviction" but give no indication of what sentence he was subjected to. Under the Rehabilitation of Offenders Act timescales are laid down after which period a conviction becomes "spent".   If his conviction is in fact "spent" then it is treated in law as if it never happened, and any reference to it by yourselves could in theory lay you open to a claim for damages for defamation. 

My gut feel, which goes along with what CD says, is that, unless you have reason to believe that there is a repeat of the problem in respect of future work with the clients you still act for, you should say nothing.

I was asked to audit a company having been brought in by the external accountant who I knew had spent some time "inside" for fraud a couple of years before.  The client was not aware of this and I found no reason to make them aware (although the guy was an awful accountant who couldn't add up).

I was asked to audit a company having been brought in by the external accountant who I knew had spent some time "inside" for fraud a couple of years before.  The client was not aware of this and I found no reason to make them aware (although the guy was an awful accountant who couldn't add up).

posted by Paul Scholes on Thu, 11/03/2010 - 15:46

A crook who can't add up ?   Are you sure he didn't recently become Prime Minister?

but what is SOR?

= Sale Or Return or Scared Of Reds

Yes it does.

If he is supposed to have been convicted of a crime that placed him on the sex offenders register then it is unlikely to affect his ability to prepare accounts etc.  Its not the same as a conviction for, say, embezzlement.

Therefore there is no professional reason for the OP to mention it. 

Doh! I had assumed that it meant 'Struck Off Register'.

Yes, it probably does make a difference. But the arguments for/against in this situation are just too confusing, as the risk is not financial and has the potential to destroy lives. Good luck with Institute.

If he is on the sex offenders register then his offence was not one of dishonesty as regards his work. There would presumably be no "proceeds of crime" to attract a report under MLR.

It may be that the conviction is spent - depending on the sentence given (if any).

Therefore the offence has no bearing on his honesty as regards his work, and the OP has no lawful justification for disclosing this to 3rd parties, and, runs a serious risk of an action for defamation against him.

There is, therefore, only one course of action open to the OP - say nothing.

Where is the defamation.

Where is the defamation if it is the truth.

Also the institute seemed that he was not a fit and proper person by his expulsion.

Posted by Anonymous on Thu, 11/03/2010 - 23:20

If the conviction is "spent" then in law it never happened and any reference to that conviction is in fact capable of being defamatory. 

The institutes opinion is a matter for the institute, but, it does not over ride the law which is very clear on the issue of spent convictions.

... are an excepted profession under the ROA.  Not sure that it provides any protection here.  Possibly EU law may take precedence?

With kind regards

Clint Westwood

The rehabilitiation of Offenders Act is there for a very good reason, and refers to effectively "tiome spent in jail".  Once a conviction is spent that is the end of the matter.  Being registered on the SOR has nothing to do with it and does not affect the time at which a conviction becomes spent. 

The motive "malice" is irrelevent.  It is a defamation to state that a person is a criminal when they are not. If a conviction is spent then it did not happen from a legal point of view and reference to it is in fact a defamation in exactly the same way that calling any other totally innocent person a criminal is a defamation.

Actions for defamatio are open to everyone and are not necessarily expensive. Indeed if done properly it can be pursued in the local county court without the need for representation or indeed the need to even commence actual defamation proceedings.

I can only repeat that the rehabilitation of offenders act is entirely irrelevant here, at least so it seems to me, given that it expressly provides no protection to members of certain professions, accountancy being one.

With kind regards

Clint Westwood

 can only repeat that the rehabilitation of offenders act is entirely irrelevant here, at least so it seems to me, given that it expressly provides no protection to members of certain professions, accountancy being one.

With kind regards

Clint Westwood

Posted by nogammonsinanun... on Sun, 14/03/2010 - 13:13

You're wrong - it is clear that this person's offence was not one of dishonesty (you dont get on the sex offenders register for fraud) and therefore the offence has no relevance to his professional integrity.  As such it does fall under the Rehabilitation of Offenders Act. Members of the accountancy profession have exactly the same protection as any one else other than in very specific circumstances (ie convictions for fraud etc).   

... me to believe your assurance with confidence if you pinpoint the legislation.  I note on reading the Act that the exceptions are dealt with by Statutory Instrument, but I do not know how to find the Statutory Instruments that have been passed under powers granted by the Act.  Maybe you have better luck.

The standard "Fit and Proper" forms that the ICAEW requires its members to sign (including non-member employees who are engaged in audit work) (Standard 1: Helpheet 18) include under paragraph 1.2(a) the question:

"Have you at any time: Pleaded guilty to or been found guilty of any offence?"

In the preamble it says "There is no need to mention any offences committed before the age of 17 (unless committed within the last ten years) and road traffic offences that did not lead to disqualification or a prison sentence."  The implication is that any other offence is required to be disclosed, however relevant (or not) the nature of that offence is to the employment duties, and whatever its age.

Leaving aside for a moment the possible argument over whether a road traffic offence which DID lead to a disqualification etc more than 10 years ago might indicate that someone is not "fit and proper" for the purposes of his employment, there is certainly no indication that "irrelevant" offences are covered by ROA.

My reading of your advice is that provided that the employee is confident that his offence is irrelevant (and therefore covered by ROA despite the exception in relation to the accountancy profession) he can legitimately lie on the fit and proper form and refuse to disclose it.  Obviously, if it subsequently came to light, then his judgement as to whether he was justified in placing reliance on ROA may be called into question.

Is that your understanding?

With kind regards

Clint Westwood

The standard "Fit and Proper" forms that the ICAEW requires its members to sign (including non-member employees who are engaged in audit work) (Standard 1: Helpheet 18) include under paragraph 1.2(a) the question:

"Have you at any time: Pleaded guilty to or been found guilty of any offence?"

It makes absolutely no difference what any institute or professional body might think it is entitled to ask. Once a conviction is spent per the Rehabilitation of Offenders Act it did not happen as far as the law is concerned, and, the applicant is under no obligation whatsoever to disclose it.  Further, any company or organisation subsequently acting on it, such as you suggest by cancelling someone's membership, that company or organisation would be in breach of the Act and open to a claim for damages by the victim.

Yes there are exemptions, and financial services are one of these exceptions, BUT, the Act states -  "In all circumstances, the person whose suitability for a position is being assessed, must be informed when the question is asked that spent convictions (or in the case of financial services, spent convictions for a relevent offence), are to be disclosed.

In the case of financial services a "relevent offence" would be fraud etc, but not as far as I can think, an offence which would place the offender on the sex offenders register.

This is not a legal forum despite someone trying to turn it in to one.

The question was about ethics not the legality of the situation.

Posted by Anonymous on Mon, 15/03/2010 - 09:27

In view of the above clear attempt to be insulting and inflamatory by the "anonymous" poster I will simply point out that any intelligent person can clearly see that ethics and legality are clearly interlinked. Indeed law is merely ethics which are imposed upon all members of society as opposed to ethics which are left to individual choice.

Pretty much the only distinction between a "legal forum" and an "accountancy forum" are:

1) A legal forum is concerned with legal matters that are not restricted to legal matters relating to accountants, to the accountancy affairs of the clients, or to the relationships between accountants and their clients, employees or the world at large on issues impinging on their activity as accountants.

2) An accountancy forum is concerned with all matters, which include but are not restricted to legal matters, relating to accountants, to the accountancy affairs of clients, or to the relationships between accountants and their clients, employees or the world at large on issues impinging on their activity as accountants.

There is a considerable amount of overlap between these two categories, namely: The legal matters relating to accountants, to the accountancy affairs of the clients, and to the relationships between accountants and their clients, employees, or the world at large on issues impinging on their activity as accountants.

Speaking personally, 99% of the reasons why I look in on AWeb have either a legal angle or a software angle, and the vast majority of those being on the legal angle.

With kind regards

Clint Westwood

when someone takes the trouble to quote the legal authority for the opinion posted.

WD - I tried to find the quote that you mentioned in the Act but could not find it.  I searched the entire PDF of the Act for instances of the word "relevant" and it only appears once, in section 7(3), which does not contain the text that you quote.  Can you state the section number?

I have identified the statutory references to the exceptions, and these are in The Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 as amended by SI2003/965 The Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2003 (there is another one for Scotland).  The 2003 SI is of no help for this purpose, and the 1975 SI which may have been of value is not available online at the OPSI site or anywhere else that I could find.

I did find a reference on the web (whose provenance I cannot confirm, and in any case was referring to Scottish law) which contained the surprising statement that it is up to the employer to decide what convictions are notifiable.  I found this patently absurd:

www.apexscotland.org.uk/rehabact_extended.pdf

"Generally it will be for an employer or other authorised person to make an assessment of the relevance of the conviction."

Although I have not found the original legislative source, one point that I have seen repeated in several commentaries is that for an employer to be able to rely on exceptions granted under the Act, the request for information must be accompanied by a statement to the effect that they are relying on that exception.  This is stated both in the above link and here

http://www.yourrights.org.uk/yourrights/privacy/spent-convictions-and-the-rehabilitation-of-offenders/exceptions-to-the-roa.html

In this respect at least the ICAEW "Fit and Proper" standard form is deficient, as it makes no reference whatsoever to ROA nor to exceptions upon which it is relying in purporting to have the authority to ask this question.

Statutory Instrument 2001 No. 3816 - The Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (No. 2) Order 2001. http://www.opsi.gov.uk/si/si2001/20013816.htm  (4) After paragraph (f), there is inserted -" (g) any question asked by, or on behalf of, the person listed in the second column of any entry in the table below to the extent that it relates to a conviction for a relevant offence (or any circumstances ancillary to such a conviction) of any individual, but only if - (i) the person questioned is informed at the time the question is asked that, by virtue of this Order, spent convictions for relevant offences are to be disclosed; and

(ii) the question is asked in order to assess the suitability of the individual to whom the question relates to have the status specified in the first column of that entry.  

I had missed the 2001 order.  That's the one.

With kind regards

Clint Westwood

No problem Clint - my fee note is in the post :)