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ICAEW severely reprimands uncooperative accountant

A practitioner has been severely reprimanded and will have to pay a fine of £5,000 and the full costs of the tribunal of £5,669.50 after repeatedly failing to provide information following ICAEW’s desktop review of his firm.

22nd Jun 2020
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According to June’s ICAEW disciplinary report, David Clarke failed to respond to the closing record of the review and subsequent email reminders in 2016. Both the Practice Assurance Committee (PAC) and the Professional Conduct Department (PCD) of ICAEW were informed of the situation and the PCD wrote to Clarke in 2017.

When he finally sent a reply, Clarke didn’t provide all the information that was asked from him. He was then asked to provide further details, relating to the way the firm dealt with client money.

After more chasing correspondence and another request from the PAC, Clarke responded by only partially providing the information that was required from him. 

Clarke failed to provide evidence of an internal client money compliance review, confirmation of whether the firm’s clients’ money account was interest-bearing, whether the bank charges on the client account were being deducted from the office account and also failed to provide the basis of the minimum requirement of £50 to maintain the client account.

In March 2019, Clarke wrote to tell ICAEW that he was closing his firm and that he wished to resign his membership. He was informed that his membership would be maintained pending the conclusion of the complaint.

Besides a fine of £5,000, the tribunal decided Clarke would have to pay costs of £5,669.50 and provide the information requested within seven weeks.

Chris Cope, director/solicitor of ANCS Ltd, comments:

We do not know of Mr Clarke’s age, but the report states that he has been a member since 1977. He must, therefore, be in his late 60s. In March 2019, Mr Clarke advised the Institute that he was closing his practice, an indication that he was retiring.

He would, upon retirement, require six years’ run-off cover to protect against any future claims. The hearing took place in March 2020, by which time one would imagine that the run-off cover policy would be in place.

A finding of a Disciplinary Committee must be disclosed to insurers, whether the practice continues or has closed. A failure to disclose a disciplinary record could result in the insurers avoiding future liability.

I also note that Mr Clarke failed to pay the fine and costs which meant his membership has ceased. Inevitably, the Institute will pursue payment. Court proceedings seeking the sum of £10,669.50 plus interest seem inevitable.

* * *

A second practitioner also ran into trouble after failing to provide information – in this case, for ignoring various requests for documents to evaluate his conduct as executor of an estate and trustee of two trusts.

Andrew Wiggett requested additional time to respond, indicating he was feeling overwhelmed but that he wanted to assist and provide the information. 

However, Wiggett didn’t reply before the new deadline and, after that, he also failed to engage in the ICAEW’s tribunal process up until the date of the hearing.

Wiggett later explained that, as he was coming to the end of his years in practice, he was finding it increasingly difficult to continue to deal with the day to day demands of the job. He showed remorse for not responding to the correspondence and not engaging in the proceedings.

The tribunal considered that the lack of response was serious, but it took into account Wiggett’s financial circumstances and his remorse, which reduced the sanctions to a reprimand and a financial penalty of £2,000 that Wiggett will have to pay alongside the full costs of £4,776.50.

Chris Cope, solicitor, comments:

Well, at least, unlike Mr Clarke, Mr Wiggett had the sense to attend the hearing. Also, unlike Mr Clarke, he paid the fine and costs, thereby securing his future membership.

Although we do not know the age of Mr Wiggett or his date of admission to membership, he advised the tribunal that he was coming to the end of his years in practice.

There is, to that extent, a similarity in these two cases: both members nearing retirement.

What is apparent from the facts reported is that both members needed support, ie from the Institute’s Support Members Group, or, possibly, from the Chartered Accountants’ Benevolent Association.

In bygone days, a visit from the local District Society could have been arranged. Sometimes a helping hand is more appropriate than wielding the big stick.

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 (7)

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By flightdeck
23rd Jun 2020 10:07

I am not very happy with this article because it is very one sided. If we're going to name and shame people then we should present a 360 degree report.

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By Rgab1947
23rd Jun 2020 10:09

Nowadays its all bout the fines as being seen as a lucrative money spinner. Its not only the Institutes but HMRC, councils parking etc. etc.

Many are computer generated so no human consideration at all.

What a miserable world we are creating. The doomsday Sci-Fi movies are becoming real.

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By Marlinman
23rd Jun 2020 11:08

I'm always reading about sole practitioners being pulled up for petty things and getting hefty fines plus costs. If they can still pursue you for the debt after you've left, I'm seriously thinking about whether its worthwhile continuing my membership.

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Replying to Marlinman:
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By John Wheeley
24th Jun 2020 07:05

What do you gain by being a member ?

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Replying to John Wheeley:
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By Marlinman
24th Jun 2020 08:29

The most useful bit is the Tax Faculty for keeping up to date with things. The only other thing is being able to give clients mortgage references.

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By Diana Miller
23rd Jun 2020 11:20

I agree this is very one sided. The compliance burden is horrendous for a sole practitioner. I know when I was suddenly having to be a carer for my Dad and still running a full time practice I rang the ICAEW for help and support in case I could not juggle everything and found then to be pretty unhelpful, inflexible and lacking in humanity
. Who is to say these individuals did not have health issues or heaven forbid suffering from the stress and burn out so many report in this profession. I just wish that on occasion the ICAEW could be seen as a supportive and compassionate body not just wielding a big stick all the time. ( I'll probably get a compliance visit now !)

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By Moonbeam
23rd Jun 2020 14:42

45 years ago I was a civil servant working for the Treasury Solicitor. My job was to bring to the High court liquidators who had failed to answer correspondence for many months.
Some of these people were clearly overwhelmed and confused, and it seemed to me then that the whole process was unnecessarily costly, inhumane, and probably didn't get any answers to the questions they'd failed to answer up to that point.
Clearly, it's easier for the institutes just to carry on doing what they've always done, rather than use a bit of brain power and think of a better way.

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