Disciplinary orders round-up October 2020
The return of Disciplinary round-up: AWEB investigates two cases from this October involving allegations of money misconduct.
As always, Blake Morgan LLP consultant/solicitor Chris Cope gives his take and explains what accountants can learn from these cases.
The ACCA disciplinary committee has ordered member Andrew Littlewood to be excluded after defrauading his employers.
Head of Finance/Treasurer for a volunteer-run Community Interest Cooperation, Littlewood was the subject of complaints from the Chairman of the Cooperation who had noticed irregularities in the accounts.
The Chairman explained that Littlewood had been interviewed about these irregularities and had admitted that he had taken money for personal use. He had falsely accounted for the removed funds.
During September 2019, Littlewood accepted a caution from Bedfordshire Police, in relation to fraud by abuse of position. He had taken over £6500 from the company.
In accepting this caution, Littlewood became liable to disciplinary action. Being discreditable to the ACCA and the accounting profession as a whole, it is standard procedure to report to the ACCA any such cautions that might be received by an accountant.
Littlewood later admitted that he was aware that he was required to immediately inform the ACCA of the caution and had failed to do so.
In December 2019, just three months after receiving the caution, Littlewood submitted a CPD Declaration to the ACCA in which he failed to disclose the caution.
Littlewood failed to attend the hearing this October. The Committee decided to hear the case in his absence. Littlewood had not sought an adjournment.
While the Committee was cautious about proceeding in Littlewood’s absence, he had written in advance that he would not be attending and would “fully accept the decision of the disciplinary committee”.
By way of mitigation, Littlewood confirmed that he had repaid the majority of the £6500. He also produced a reference from his present employer.
The ACCA Disciplinary Committee went on to order that Littlewood be excluded from membership, as well as ordering that he pay the sum of £7,713.50 by way of costs.
Chris Cope, solicitor and consultant to Blake Morgan LLP, solicitors, comments:
What is extraordinary about this case is that the Bedfordshire Police decided to offer Mr Littlewood a caution in respect of “fraud by abuse of position”.
He was an employee and a qualified accountant. He stole £6500 for his own personal use (he had financial difficulties) and had fabricated the company’s records in order to hide his crimes. Why did this not result in a criminal prosecution? Had the sum taken been under £100, then perhaps a caution may have been appropriate. As it was, the company (a volunteer-run community organisation) had only survived as a result of members making a number of loans. Note also that Mr Littlewood had only repaid a majority of the money taken.
Chartered accountant Peter Pring has received a severe reprimand from the ICAEW, fined £12,000 and ordered to pay costs of £3480 after breaching the Code of Ethics, the Clients’ Money Regulations and the Money Laundering Regulations.
Firstly, Pring was found guilty of signing independent examiners reports whilst not qualified to do so, as he was not sufficiently independent.
He did this for five years, between March 2012 and March 2016.
Secondly, Pring allowed office money to be paid into a client account; the money was found to have no actual connection to any client.
Thirdly, Pring did not, over a period of four years, conduct ongoing monitoring of his business relationship with all clients.
Finally, Pring breached the Money Laundering, Terrorist Financing and Transfer of Funds Regulations by failing to ensure that customer due diligence measures were up to date.
Chris Cope comments:
In the second complaint, there is reference to Schedule 1 which sets out all the occasions when Mr Pring allowed office money to be paid into client account. However, this schedule is not published. It is impossible, therefore, to understand on how many occasions this occurred and what funds were involved.
Breaches of both the Client Money Regulations and the Money Laundering Regulations do tend to feature all too frequently in these reports. This would suggest that many practitioners are not sufficiently informed about these regulations. Perhaps there needs to be greater emphasis in both areas regarding CPD. If in doubt, check the regulations. Don’t assume you know all about the regulations which are revised on a regular basis.
If you are presently subject to a complaint or want more information about Chris Cope and Blake Morgan LLP, solicitors, you can visit their website here.