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Mounting errors force accountant to accept £13,000 fine

An Orpington-based accountancy firm, together with its principal, have been hit with fines of £13,000 and costs of over £4,000 due to the sheer scale of the errors perpetrated on tax returns and audit reports.

23rd Sep 2019
Practice Editor AccountingWEB
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Alan Roger Le Fort and his accountancy firm Le Forts both agreed to consent orders offered by the ICAEW’s investigation committee in July 2019 and published in September’s ICAEW disciplinary orders.

Le Fort was saddled with the majority of the fine of £10,000, along with costs of £3,515 and a reprimand.

The investigation committee compiled five key errors, which spanned incorrect audit reports, tax returns and preparing a company’s abbreviated financial statements.

In the first complaint, the investigation committee alleged that. Le Fort peppered errors across four years’ worth of accountant’s reports on a company’s unaudited accounts from December 2009 year-end until 2012 year-end.

The investigation committee argued that Le Fort knew that these accounts were incorrect as they required amendment because the dividends declared had not been confirmed. Le Fort submitted them anyway.

The main thrust of the complaint, though, concerned Le Fort’s preparation of self assessment tax returns for three clients.  

In the case involving Mr Y’s tax return, the dividends Le Fort declared each year between 2009 and 2013 did not reflect the shareholdings. Neither did the tax returns accurately reflect the monies withdrawn each year.

The firm repeated the exact same mistakes with Mr Z’s self assessment tax return from 5 April 2009 to 5 April 2013. These errors continued from 2010 to 2013 for Mrs Z’s tax return.  

Le Fort’s errors were not consigned to tax returns. In the fifth complaint, the investigation committee found that he had incorrectly prepared a company’s abbreviated financial statements for the year ended 31 December 2010.

These errors included overstating the stock balance by £28,129, understating the creditors by £48,648 and overstating the profit and loss account reserve by £76,777.

The investigation committee noted that Le Fort should have known that the figures were incorrect because they did not agree with the full financial statements prepared for the same period.

Le Fort bungled another abbreviated financial statement for ‘X limited’ when the accounts failed to comply with The Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008.

According to the consent order, the financial statements did not contain a note explaining the non-comparability of corresponding amounts for the financial year ended 31 December 2010 with the financial statements that had been approved for that period.

Le Forts also accepted a separate consent order and reprimand after failing to respond substantively to an email from a chartered accountancy firm dated 29 October 2014.

For this separate complaint, the firm had to fork out £3,000 and pay costs of £590, on top of the fine and costs Le Fort himself had to pay for his mistakes. 

Chris Cope, solicitor/director of ANCS Ltd (an advisory service to accountancy practices) comments:

ANCS

So what do you do? You know you have been at fault. The Committee has correctly identified the errors and deemed this misconduct. In its view, you and your firm should pay a fine of £13,000, plus costs.

You have the right to reject the consent orders, in which case the complaints are referred to the Disciplinary Committee. There will be a hearing in London before a tribunal, chaired by a QC and including a lay member and a chartered accountant. The case against you will be presented by an in-house barrister.

You know that the costs will increase from the present figure of £4,105. It is possible that the fine could also increase. Equally, with a good plea in mitigation, the Disciplinary Committee (not being told of the proposed consent orders) could decide on a lesser fine.

Legal representation will be costly, with the figure somewhere around £5,000 at least.

So, do you fight your corner at the risk of an even costlier outcome, or accept the consent orders and write out a hefty cheque? Not an easy decision to take.

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

Replies (5)

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By AndrewV12
24th Sep 2019 11:46

Extract above
'Le Fort’s errors were not consigned to tax returns. In the fifth complaint, the investigation committee found that he had incorrectly prepared a company’s abbreviated financial statements for the year ended 31 December 2010.'

These errors seem to have occurred a long time ago, I would hate to think what he has been up to in the meantime.

Thanks (1)
David Ross
By davidross
24th Sep 2019 19:34

Not being an ICAEW member, how do these things come up? Does ICAEW go through the member's work looking for errors, or does a client have to complain?

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By Tickers
25th Sep 2019 00:56

Are these cases not more of an incentive for practitioners not to maintain their memberships. I mean, what is the consequence of not being a “qualified” accountant. Unless audit is a large part of you business it appears to give you a competitive advantage by not being a member???

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Replying to Tickers:
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By paul.benny
25th Sep 2019 13:46

You're saying that disciplinary action for doing a bad job is an incentive not to maintain membership?

I guess that's true if don't care about the quality of your work - and you think your clients also don't care.

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Replying to paul.benny:
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By AnnAccountant
25th Sep 2019 15:04

Being forced to defend perfect work could be time consuming.

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