Disciplinary orders round up May 2018

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May’s disciplinary orders feature a practitioner without a practising certificate and an accountant who took advantage of a vulnerable relative to fuel a gambling addiction.

Reviewing the cases from the past month and adding his expert commentary is Chris Cope from Accountants National Complaint Services (ANCS) Limited. You can learn more about ANCS here.

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The director of Northern Accountants who saw a practising certificate as "a piece of paper" has been excluded from the ACCA and handed a fine of £3,500 after it was found he didn’t hold any valid accreditation between May 2009 and October 2017, the ACCA has reported.

Philip Ellerby – a member of the professional body since 2006 – is named as the managing director and founder on the firm’s website, which advertises public practice services, yet he told ACCA in 2013 that he would not become a director until he held the required certificate.

Ellerby admitted to making a deliberate decision to conduct public practice work without a practising certificate because he was experiencing financial difficulties. But this didn’t wash with the Disciplinary Committee who said “many accountants who have properly paid the fee for their practising certificates face similar pressures”.

Ellerby, who lectured other accountants on how to build a successful practice, accepted that he acted dishonestly and kept “under the radar of ACCA pending sorting out my practising certificate". He confirmed when submitting his CPD returns in 2014 and 2015 that he had “not engaged in public practice activities without holding a practising certificate”.

Ellerby’s description of a practising certificate as a “piece of paper” led the ACCA disciplinary committee to conclude that he didn’t recognise the importance of holding a practising certificate, nor understand the seriousness of his behaviour.

As Ellerby had not paid fees for a practising certificate since 2009, the ACCA disciplinary committee decided that such sustained dishonest conduct represented a departure from professional standards. The committee, therefore, felt the only sufficient sanction was exclusion and a £3,500 fine.

Ellerby was also ordered to pay costs of £6,000 to the ACCA.

Expert commentary: Chris Cope, director of Accountants National Complaint Services Limited

Exclusion was, I think, inevitable, although it is interesting that on this occasion the DC decided to fine Mr Ellerby £3,500, as well. The ACCA disciplinary committee rarely fines, particularly when it decides upon an exclusion order. If he is in financial difficulty, Mr Ellerby is going to have a problem finding the £9,500 by way of fine and costs. The ACCA may accept payment by monthly instalments.

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An ACCA member who withdrew thousands of pounds from a vulnerable family member’s bank account to fund holidays and her gambling habit has been excluded from the professional body, according to the ACCA.

Kelly Stevens was sentenced to 28 months imprisonment on 24 November 2017 at Swindon Crown Court for defrauding a family member out of £26,600.

Stevens took advantage of the relative over a five-year period, in which she emptied a bank account and spent the money on “high living”, holidays and gambling. Her fraud only came to light in 2017 when the account was overdrawn and she was confronted by another family member. According to the judge, she had no intention of paying back the money.

The ACCA investigation picked up after Stevens’ conviction, with the disciplinary committee finding that her actions brought discredit to the accountancy profession. However, in her written response (she was unable to attend the hearing because of her sentence) Stevens argued that it was a “family matter and nothing to do with work or my profession”.

The ACCA Disciplinary Committee considered the emotional and financial harm Stevens’ “selfish actions” caused. Although Stevens repaid £1,500, showed some remorse and admitted a longstanding gambling addiction, the ACCA felt no other decision than exclusion would be appropriate, especially since the large-scale fraud was “a very serious departure from proper and acceptable standards”.

The ACCA initially applied for costs against Stevens of £5,799.10.

While Stevens submitted a financial statement to demonstrate that she had no assets or income, the committee decided that as her actions had led to disciplinary action, Stevens should bear the costs of the proceedings.

It was concluded that a payment plan would be considered once Stevens had the ability to pay the costs assessed at £3,000.

Expert commentary: Chris Cope, director of Accountants National Complaint Services Limited

Gambling is a serious addiction and should be treated in the same way as alcoholism. Nevertheless, I do not believe that the Disciplinary Committee had any alternative other than to exclude Miss Stevens, even if the latter had produced a medical report outlining an addiction to gambling over many years, had that been the case.

Find out more about Chris Cope and the Accountants National Complaint Services Limited here

About Richard Hattersley

Richard Hattersley

Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.

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21st May 2018 16:57

It makes you sick, where are the Carillion crooks who prepared dodgy accounts, plus the ones who issued a clean audit report?

I have no respect for any of these so-called institutes as long as the big fiddlers and dodgers remain members.

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22nd May 2018 07:47

Agree entirely with Mr Mischief.

ICAEW etc take the easy option.

Thye will not and dare not go near the large firms who, on a regular basis bring the profession into disrepute.

The audit and "business recovery" industry is corrupt from top to bottom.

"Respectable" people at the top are simply committing legalised fraud against shareholders, buisness owners and the public and their friends in power are happy to see them continue.

Thanks (8)
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to Trethi Teg
22nd May 2018 10:32

I so agree with the above comments; can we not start a ball rolling about how the ICAEW's own standards bring the ICAEW [not to mention the FRC} into total disrepute? How sad and dispiriting that my statement here is in the expectation that the above two AUGUST bodies will now take it out on me.

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22nd May 2018 09:54

Its a warning to us all, though the above are extreme examples, I have to agree with the comments above about poor audits and Companies that will put there name to anything.

Lots of reward, without apparently any risks.

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22nd May 2018 10:04

Perhaps we should push so that all auditors good or bad have to trade under a different name ie ABC auditing Ltd so that we can differentiate ourself from the auditors.

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By gcannon
22nd May 2018 10:16

I assume that AVN will not be doing any more videos telling everyone how great Phil Ellerby and Northern Accountants are after this. AVN Firm of the Year in 2014 and, according to Steve Pipe's book, 'one of the worlds most inspiring accountants'.

Thanks (11)
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to gcannon
24th May 2018 14:13

Surprisingly enough he still features on the AVN website. I would have thought any reference to him would have been removed rather quickly.

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22nd May 2018 11:08

The list of dodgy accountants who sign off dodgy accounts for dodgy payments is very long, and one is tempted to say that the ones that get caught are the low hanging fruit. Tescos, RBS, etc etc etc... Say no more.

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22nd May 2018 11:44

All the Big 4 bashing aside - these clowns did deserve to get struck off.

Thanks (5)
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22nd May 2018 13:07

In the financial crisis, over 300 European banks needed emergency funding, some sort of State support in its various guises. Some key facts:

1. Every single one had a clean audit report issued within 12 months of the above funding.

2. NOT ONE SINGLE disciplinary action of any sort that I am aware of - please point me to the facts if I missed one - arose concerning the dodgy FDs and dodgy auditors.

Who brings the profession into greater disrepute? Ellerby, or the dodgy FDs and auditors who helped bring the global financial system crashing down around our ears?

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By Cleggy1
to mr. mischief
22nd May 2018 14:05

mr. mischief wrote:

Who brings the profession into greater disrepute? Ellerby, or the dodgy FDs and auditors who helped bring the global financial system crashing down around our ears?


Mr Ellerby has unfortunately admitted dishonesty, A dishonest accountant does bring the profession in to disrepute.

ACCA had no choice.

I wish him all the best for the future.

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to mr. mischief
20th Jun 2018 17:31

You refer to European banks so obviously that includes Ireland. As a matter of fact, at least two Irish qualified accountants were jailed in 2016 (one for over three years) for their involvement in a circular series of transactions relating to end of year window dressing of the balance sheet of a publicly quoted Irish bank in 2008. The trial of another one is, co-incidentally, almost complete with the jury considering a verdict as I write.

Disciplinary action by their professional bodies was usually suspended pending the criminal cases.

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to Brend201
20th Jun 2018 17:34

[quote=Brend201]

You refer to European banks so obviously that includes Ireland. As a matter of fact, at least two Irish qualified accountants were jailed in 2016 (one for over three years) for their involvement in a circular series of transactions relating to end of year window dressing of the balance sheet of a publicly quoted Irish bank in 2008. The trial of another one is, co-incidentally, almost complete with the jury considering a verdict as I write.

And the verdict came in last week: guilty of conspiracy to defraud and false accounting. Sentenced today to six years imprisonment. Incidentally, the guilty parties did not benefit financially from their crimes. The accounts of the quoted PLC bank were misleading because of the dodgy transactions that the culprits arranged to make the year-end balance sheet look better. It didn't matter in the end: the bank went bust a few months later and was nationalised.

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22nd May 2018 15:24

Agree, they had no choice. Where we can and should be is that they feel they have even less choice with the dodgy FDs and dodgy auditors of Carillion, busted banks and so on.

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30th May 2018 08:09

Chris Cope's comment that "exclusion was, I think, inevitable" at the decision in Ellerby. He has recently acted for a member before an ICAEW tribunal in a case where the tribunal found against the member for unprofessional practice, improperly retaining client funds (theft and fraud of HMRC in everyday language), signing audit reports when not a registered auditor. The member was fined but not expelled. ICAEW still consider him suitable to be a member !!

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