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Institute severely reprimands EY

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22nd Jun 2015
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The ICAEW has revealed its disciplinary orders for June. EY and a convicted fraudster were on the receiving end of the harshest decisions.

EY was criticised by the Institute for failing to handle a conflict of interest properly at the now defunct Hellas Telecommunications. EY became the administrator of Hellas after it had been its accountant during the previous three years, a breach of the ICAEW's code of ethics aimed at stopping conflicts of interest.

The ICAEW fined EY £250,000, along with a severe reprimand and ordered it to pay costs of £95,000. Margaret Mills, an EY partner, was fined £15,000 and received a severe reprimand, the ICAEW said.

“The breaches of the code set out in the heads of complaint were inadvertent, however, EY regrets that it fell beneath its usual high standards in this instance and has taken steps to help ensure that inadvertent errors similar to those which resulted in the breaches are not repeated,” EY said in a statement.

In another case, the famous Australian tax evader Philip Eric De Figueiredo was handed an exclusion and a fine for creating false and inflated invoices. His disciplinary hearing was unrelated to his Australian dealings, but contributed to the decision with ICAEW referencing his criminal convictions extensively.

“The defendant has admitted acting dishonestly in clients’ affairs which perpetrated serious tax frauds in Australia. He has admitted conspiring to commit tax fraud,” said the ICAEW decision. “This is plainly conduct which is unacceptable and inexcusable for members of ICAEW and the appropriate sanction must be applied.”

De Figueiredo was complicit in the biggest and most complex tax evasion scheme in Australian history, totalling an alleged £665m in evaded taxes. He had been sentenced to six and a half years in jail, but this was slashed to two after he turned informant. After his release he left Australia and moved to Jersey.

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