Accountant fined over client tax refunds

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The ICAEW has handed down fines of £12,300 and a severe reprimand to a sole practitioner who processed more than £100,000 worth of client tax refunds through his firm’s office account.

Over a period of five years, David Guest of firms PPG Accountants and David T Guest also failed to send engagement letters to all of his clients and didn’t submit his practice assurance annual return.

In 2006, a QAD visit found PPG Accountants was not complying with standards, the Institute's disciplinary tribunal heard

Guest provided written assurances he would...

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Just what does someone have to do to actually be struck off as a member of ICAEW??? 

 

 

 

 

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Not pay the fees

handymann7088 wrote:

Just what does someone have to do to actually be struck off as a member of ICAEW??? 

Not paying the fees seems about the only way.

 

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Proportionality

I think a fine for being silly is proportionate. (he did not steal the money only put it through the wrong account, ICAEW client money rules) 

It also shows the disciplinary process is working and standards are being maintained which I suspect is upsetting to some.

In what way would the above two posters have punished the above?

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Father Ted ....

Perhaps he should have used the Father Ted defence "The money was just resting in my account", might have got off lighter ....

Humour aside, the commentary provided stated that the account was still overdrawn whilst the clients money was on deposit, presumeably mitigating his interest charges quite nicely.

Thats a little more than "silly"

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Oh we'd have just let him off with a slap on the wrist of course.

This is supposed to be a professional body not a cosy members club that gets you a nice set of initials and no responsibilities at all.  Naughty boy, give us a fat fine but carry on regardless.

If this is standards being maintained one wonders just how low those standards are.

 

Silly?? Not the word I would use for any of these gentlemen.

 

 

 

 

 

 

 

 

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?

handymann7088 wrote:

 Naughty boy, give us a fat fine but carry on regardless.

That's not what it says in the report is it?

A nasty fine, a large amount for a small practice, and ongoing monitoring!

He could resign and not be subject to this?

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speeding

I can understand not knowing a rule and being told off...fair enough...we cant all possible know everything but when you have been told off  once to ignore this and to carry on breakng the same rule....

 

Thats silly...

 

 

mind you I did get zapped by a speed camera last night and I know there are limits...so what do I know

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I see no reason

why clients money should not go into a seperate account except, of course, bank charges.

I certainly (regardless of rules) would not want clients money mingled with mine.

Perhaps he was trying to impress the bank manager.

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I concur

We are not talking about a once in a blue moon repayment or a genuine mistake with accounts - this was an obvious attempt to utilise clients funds that would have quickly turned into a quasi ponzi scheme if left unchecked - how long until said agent started manufacturing tax repayments to balance his own bills?

 

 

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Could also be a result of an overloaded practitioner.

Not many people read the rule books these days and carry on in complete ignorance of them.

The money was not stolen in this example and he did not commit a crime? only a breach of ICAEW regulations (important none the less).

Had he not been a member he would have been able to do this anyway?

I ask again, what do you think the appropriate penalty should have been? and while we are there, were the penalties for practising without a practising certificate sufficient? A breach of equal merit?

6 years no practising certificate no P.I. Insurance = severe reprimand,....I bet the client money rules were never looked at? So that was the way to do it?

whose clients were more at risk I ask?

 

 

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Real risk to clients

Where client money is not in a desgnated account it is most certainly at risk.

Especially so if paid into an overdaft-based office account where, as most of us are aware, is usually repayable on demand to the bank.

The real risk is that the practicioner has financial difficulties and then the client monies are lost when the bank forecloses or withdraws borrowing facilities - clients money goes to the bank.

We don't know the financial situation of the guilty party here (ie. good or bad).  This is not necessarily relevant to applying the rules - the rules have to assume the worst - some financially pressured practicioners will certainly present a real risk putting client funds into their overdraft account.

My personal preference remains to only receive client tax repayment monies as a last resort in a very few cases each year.

 

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Disciplinary Action by ICAEW

Here we go again ..... punish the Sole Practitioner or Small firm but do nothing about the so called Auditors of the Banks and Building Societies.

But then, silly me, I forget that he who pays the piper calls the tune

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It still gets me...

 

I was a sole practitioner who ran a high growth success provincial firm until I made the "mistake" of having a nervous breakdown and falling into the clutches of the ICAEW disciplinary section. (Best summary is here: http://www.accountingweb.co.uk/anyanswers/question/does-anyone-record-client-telephone-calls )

 

My experience is that only two things will warrant a significant punishment from the ICAEW:

 

1)     Don’t pay for membership fees

 

2)     Become mentally unwell

 

Albert

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