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Disciplinary: Chartered accountant witnesses client loan non-signing

The ICAEW has severely reprimanded the head of tax planning at an accountancy firm for 'witnessing' the signing of a client loan agreement when neither client was actually present. 

20th Jan 2020
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Witnessing a signature
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Last month we heard about a decision involving Roger Nyman, a partner who presided over a client loan agreement signing without either client present. And this month, one of the employees who ‘witnessed’ the loan agreement signing was pulled in front of the ICAEW disciplinary tribunal.

Lawrence Smith, who was head of tax planning at the firm, confirmed to the tribunal that it was his signature on the loan agreement. And while he couldn’t argue that the handwriting on the agreement was indeed his own, he claimed that he has no recollection of signing the agreement as a witness.

But the loan agreement for £100,000 between two of Nyman’s clients did indeed carry Smith’s signature along with his qualifications as a chartered accountant and address claiming that he witnessed the clients’ signing the papers. 

There was a second person who ‘witnessed’ the non-signing of the loan agreement between the clients, but since that person is not a member of the ICAEW, their identity is not disclosed in the disciplinary documents.

So how did Smith’s signature appear on the document? Was there foul play at hand? While Smith doesn’t believe that anyone added his signature, he did suggest that there is that possibility.

He explained that since he wouldn’t sign a document without first reading it, there is the possibility the agreement may have been covered by other documents when he signed it.

Smith informed the tribunal that he’s learnt a lesson from this incident and he will take greater care over what he signs in the future.

The tribunal viewed Smith’s involvement as a “reckless act on his part” and would “have expected [Smith] as a chartered accountant and a responsible professional person to have taken care in appending his signature as a witness to such a document”.

For his involvement, Smith now has a severe reprimand on his record and a fine of £3,000 to pay, along with the costs of £5,347. But Smith got off a little lighter than the firm’s partner Nyman who was excluded and ordered to pay a fine of £4,000 and the disciplinary costs of £14,662. 

Chris Cope, director of Accountants National Complaint Services Ltd, comments:

This is an odd case. On the one hand, Smith admitted that the signature on the loan agreement was his. On the other, he asserted that he had no recollection of signing the agreement as a witness. The loan agreement is dated 1 April 2011. The Disciplinary Committee hearing took place on 16 July 2019, some eight years later. One can readily understand that few people are likely to recall whether they signed an agreement made some eight and a quarter years before. It would appear that the disciplinary tribunal had written evidence from Roger Nyman, the principal of the firm (and presumably Smith’s boss) that he, Nyman, had instructed Smith to sign. On the other hand, Smith told the tribunal, in writing, that he would, in principle, never sign an agreement without first reading it. He had no recollection of doing so.

If you are presently subject to a complaint, you can call the Accountants National Complaint Services Limited for advice (01769 581581) or visit their website

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Replies (5)

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By gillybean04
20th Jan 2020 23:23

He didn't notice that there was a document covering it when he put pen to paper?

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By bobsto12
21st Jan 2020 10:41

All sorts of "virtual" activities take place in companies in the real world.
Supposed board meetings to agree statutory accounts, agreements of all kinds

Its not clever but if your boss is elsewhere and tells you to do it would you really say no and say cause the accounts to be submitted late?

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By graydjames
21st Jan 2020 10:57

Harsh!

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By Ben Alligin
21st Jan 2020 11:03

A bit of a harsh April Fool prank!

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By [email protected]
21st Jan 2020 11:31

If you refused to do something which you have been instructed to do, you would surely remember the incident and at least there may be an email covering your actions, or some personal memo to cover yourself.

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