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Depressed accountant gets ICAEW fine reduced

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11th Dec 2013
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An accountant suffering from chronic depression has won an appeal to have his ICAEW disciplinary sentence reduced.

The unnamed practitioner was fined £2,400, ordered to repay client fees of £457 and reprimanded in July for not sending clients’ tax returns to HMRC and failing to respond to a handover request from another accountant.

His depression was considered as a mitigating feature of the hearing, and the material amount of money lost by the clients as an aggravating factor.

The accountant was unable to attend the hearing due to his depression, and appealed the decision as he said his illness should be a complete defence to the charges, rather than just mitigation.

He appeared before the appeal committee in September, and told them that his illness had come as a shock to him and he had not previously understood he was ill.

The practitioner was “very remorseful” at having let his clients down, has since reduced his practice and refuses to act for clients if he feels unable to cope.

The committee reported that the accountant had also started receiving treatment for depression and has repaid his client’s fee of £457.

“We are satisfied that the appellant’s depressive illness was the reason he did not appear before the DCT,” the appeal committee ruling read.

“Indeed, it clearly required impressive courage for the appellant to appear before the AP at all. We were convinced that he is currently doing his best to cope, and is succeeding.”

While the practitioner’s grounds of appeal were unsustainable - i.e. his depression was not a complete defence - the committee treated the appeal as an appeal against the sanctions and agreed to reduce his fine to £100.

The exceptional circumstances of the case, and after having seen the appellant in person caused the committee to take a more lenient view, but said they neither criticised the former sentence nor wanted this to encourage others in similar situations.

“This is not intended to encourage other members of ICAEW who have failed to deal with their clients’ affairs and have failed to answer correspondence to argue that they must have been suffering from depression. In this case we were left in no doubt that this appellant is entirely genuine,” they said. 

* * *

Other cases in this month's disciplinary listings include a £10,000 fine and a severe reprimand for an accountant who prepared misleading management accounts for a solicitor client.

Michael Thorpe of Wombwell, Barnsley, prepared misleading management accounts and issued unauthorised accountants' reports to the Law Society on two occasions, when the firm had failed to comply with the solicitor's accounts rules (SAR). 

The client had been engaged by Thorpe since 1988, who became its engagement partner in 2002 and then prepared its management accounts, year-end partnership accounts and was the firm's reporting accountant for the SARs.

Between 2002 and 2004, the client suffered an unauthorised expenditure of more than £1.3m in which the solicitor's senior partner was found guilty of six counts of theft from his firm. His wife was also charged with theft but found unfit to stand trial, and the senior partner was sentenced to seven years in prison. 

This took place while Thorpe was the firm's accountant, which the disciplinary tribunal said he shouldn't have closed his mind to "any professional scepticism that he ought to have shown, preferring instead to take on blind trust what he was told by his client." 

"He deliberately failed to inquire as to numerous irregular and odd transactions," enabling the theft to happen.

The tribunal found that while Thorpe did not act dishonestly, Thorpe was reckless and naive and had conducted himself without professional scepticism and had failed to engage the skills designed to protect clients from criminal behaviour. 

It found that that was "serious professional misconduct" and ordered £10,000 to be paid in costs and fines within two years, along with a severe reprimand. 

* * *

Another feature of December's disciplinary listings was a practitioner who was banned for 10 years and was previously jailed for six-and-a-half years after being found guilty for conspiracy to defraud. 

Formerly Majorca-based Richard Pollett was an accomplice to Ponzi scheme fraudster John Hirst, and helped him swindle investors out of thousands of pounds

He was recently ordered to repay victims £90,000

The ICAEW found that he should be excluded for at least 10 years, and must pay the investigation committee costs of £2,575.

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By carnmores
11th Dec 2013 13:18

well they are getting there at last

is a representative of CABA available to advise the disclinary committee in such cirscumstances 

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By Albert Camus
11th Dec 2013 17:15

At last!

A glimmer of recognition form the ICAEW as to the effect mental health issues can has on members. Whilst a step in the right direction, there is still a very very long way to go.

 

Albert Camus

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By jennyj12
12th Dec 2013 09:31

I really hope that some of the other professional bodies take notice of this.  Unfortunately I have experienced a similar thing with my husband recently but the body involved seemed to dismiss the effect of depression and we are left having to pay costs. We are too scared to appeal in case we get landed with more costs that we can not afford. 

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