DISCIPLINARY ORDERS AND REGULATORY DECISIONS

DISCIPLINARY ORDERS AND REGULATORY DECISIONS
Date published: 7 October 2015
Disciplinary orders
Appeal Committee panel orders
1
Francis J Birchall ACA
1–5
Investigation Committee consent orders
2
Philippos Soteri FCA
6
3
Darren Harding ACA
7
Regulatory orders
Insolvency Licensing Committee
4
Mr Kevin Roy Mawer FCA
8
1
APPEAL COMMITTEE PANEL ORDERS
1
Mr Francis John Birchall ACA of 5 Penrhos Road, Hoylake, WIRRAL, MERSEYSIDE,
CH47 1HU.
A panel of the Appeal Committee made the decision recorded below having heard an appeal
on 10 September 2015
Type of Member
Member
Date of Disciplinary Tribunal
Hearing
18 February 2015
Date of Appeal Panel Hearing
10 September 2015
1.
Between 24 January 2012 and 6 February 2012 Mr F J Birchall ACA paid clients’ money into
his personal bank account on 4 occasions totalling £8,762.64 contrary to paragraph 10 of the
Clients’ Money Regulations.
2.
Between 25 May 2012 and 10 August 2012 Mr F J Birchall ACA failed to provide a response
in writing to the issues raised during the firm’s practice assurance visit on 29 March 2012 as
required by Regulation 15 of the Practice Assurance Regulations.
3.
Between 4 October 2005 and 22 December 2012 Mr F J Birchall ACA failed to comply with a
written assurance he had given on behalf of his firm, Birchall & Co, following a QAD visit that
he would notify clients of the basis of fees and the complaints procedures by letter.
Francis John Birchall ACA is therefore liable to disciplinary under Disciplinary Bye-law 4.1c
‘…committed a breach of the bye-laws or of any regulations or has failed to comply with any order,
direction or requirement made, given or imposed under them’
in respect of head 1
and 4.1a
‘…in the course of carrying out professional work or otherwise he has committed any act or default
likely to bring discredit on himself, the Institute or the profession of accountancy’
in respect of heads 2 and 3.
Sentencing Order
(a) A reprimand;
(b) A fine of £1,500; and
(c) Costs of £3,650
Appeal against finding?
No
Appeal against Sentencing order?
No
2
Appeal against Fine and Costs
Yes
Decision of Appeal Panel
Appeal Dismissed and ordered to pay costs of £1,144
Procedural matters and findings
1
The Investigation Committee was represented by Ms Annabel Joester
2
The appellant did not attend and was not represented
3
The hearing was in public
Grounds of appeal
The grounds of appeal set out in the appellant's letter of 13 March 2015 were to the effect that
he is a retired chartered accountant and that the sums that he was ordered to pay are
excessive, extortionate and beyond his means.
Decision
The appeal was dismissed and the appellant was order to pay appeal costs of £1,144
Reasons for decision
1
2
The appellant Francis John Birchall ACA appeals against the fine of £1,500 and the
order to pay costs of £3,650, each imposed on him on 18 February 2015 by the
DCT. The grounds of appeal given in the appellant's letter of 13 March 2015 were
to the effect that he is a retired chartered accountant and that the sums that he was
ordered to pay are excessive, extortionate and beyond his means.
The charges related to a period of time when the appellant was the sole principal
of the accountancy practice carried on under the name Birchall & Co Chartered
Accountants from his home in Hoylake in The Wirral (he had retired from that
practice at the end of 2012). There were three charges, as follows:
2.1
On 4 occasions between 24 January 2012 and 6 February 2012 he paid
client's money totalling £8,762.64 into his personal account contrary to
paragraph 10 of the Client's Money Regulations, this being alleged to
have been in breach of Disciplinary Bye-law 4.1c as constituting failure to
comply with the requirements of those Bye-laws.
2.2
Between 25 May 2012 and 10 August 2012 he failed to provide a response in
writing to the issues raised during a QAD visit on 29 March 2012 as required by
regulation 15 of the Practice Assurance Regulations, this being alleged to have
been in breach of Disciplinary Bye-law 4.1a as default in carrying out
professional work likely to bring discredit on himself, ICAEW or the profession
of accountancy.
2.3
Between 4 October 2005 and 22 December 2012 he failed to comply with
the written assurances given following a QAD visit that he would notify
clients by letter of the basis of fees and of complaints procedures, this also
being alleged to have been in breach of Disciplinary Bye-law 4.1a as
default in carrying out professional work likely to bring discredit on himself,
ICAEW or the profession of accountancy.
3
3
The appellant did not attend the OCT hearing, and has not attended this appeal
hearing, saying that he is not in a financial position to do so (he continues to live in
Hoylake in The Wirral).
4
The nature of the complaints that were made against him were summarised in the
DCT's written Reasons, in particular:
5
6
4.1
The payment of client's money into the appellant's personal bank account
related in every case to a tax refund received on behalf of the client during
February 2012 at a time when the practice account was not overdrawn, and
after deduction of fees owed to the practice the balance was appropriately and
properly paid out. The appellant's mitigation was that he had acted in good
faith albeit in breach of the Bye-laws.
4.2
The appellant's persistent delay was in providing required information
following a QAD visit. Even then he did not provide all of the information
required. His mitigation was that he had broken his collar bone, and that his
sister had cancer.
4.3
His persistent failure to provide his clients with written terms of engagement
and of a complaints procedure also followed a QAD visit. His mitigation was
that he explained his terms of engagement orally to each client, and that no
client had ever made a complaint against him.
The first issue is whether the fine was excessive and extortionate. We have been
referred to the following sections of the ICAEW Guidance on Sentencing (March 2015):
5.1
In relation to the keeping of client's money, the recommended starting
point in relation to keeping small sums for a short period is a reprimand
and a fine of £1,300: section 11.a 1 .
5.2
For failing to cooperate following a PA visit, the recommended starting
point is a severe reprimand and a fine of £5,750, with consideration of
withdrawal of practicing certificate: section 1O.e1.
5.3
For failing to follow procedures, the starting point for
; failing to maintain
records is a severe reprimand and a fine of £5,750: section 1O.d3and for
failure to fulfil an assurance (single breach), a reprimand and a fine of
£1,725: section 1O.e4 ·
The DCT set out in paragraph 26 of their Reasons the following matters as being
relevant to sentence:
"Separation of client monies and compliance with regulations are serious
matters... The tribunal took account of the Guidance on Sentencing. In
mitigation, Mr Birchall has no prior disciplinary record, the account into
which the client monies were paid was not at any time overdrawn, the
money was held briefly and the amounts concerned were not great, and
personal and family medical issues had been present."
4
7
In all the circumstances related above, the fine of £1,500 imposed by the DCT
(together with a reprimand against which there is no appeal) clearly took account
of the appellant's mitigation. We consider the fine to have been in accordance with
the Guidelines on Sentence, to have been neither excessive nor extortionate, and
indeed more appropriately described as lenient. The DCT made no error.
8
The costs claimed and awarded by the DCT we were told reflected a reduction from
the actual hours spent in investigation, plus preparation for and representation at
the DCT hearing. A schedule of the costs to be claimed was sent to the appellant
in advance, and no comments were received from him. Here again the DCT made
no error.
9
In all the circumstances this first ground of appeal is dismissed.
10
That leaves the second issue, which is whether the appellant can afford to pay. If
that were established in fact, it could certainly be taken into account by this appeal
panel. However the appellant has given scant disclosure of his means, indeed
limited to current income and his current bank account. He has ignored a number
of requests to disclose his capital assets, including in particular the value of his
home in The Wirral. At an early stage of the investigation he was asked to comment
on a summary of visit findings which included:
"Mr Birchall operates his practice on a part time basis, his main
occupation being his property business interests'.
The appellant's response to that at the time was to say "CORRECT". However we
have heard nothing about any property assets that he may have (although there are
some indications that he does receive some payments by way of rent). At the DCT
stage he was invited to disclose his means on the regulation 13 form, but declined
to do so.
11
As a retired chartered accountant he could have no doubt about the importance of
disclosing his capital assets if he is to sustain his allegation that he is unable to pay
the fine and costs imposed, and about the consequence of non-disclosure. The
consequence of his non-disclosure is that this appeal panel has not been given the
necessary evidence on which to uphold his allegation that he does not have the
means to pay, and cannot allow his appeal on that ground.
12
This appeal is accordingly dismissed, with an order that the appellant pay the further
costs of the appeal. They are claimed in the sum of £1,144. A schedule of those
costs has been provided to us, and was sent in advance to the appellant. He has
made no comment on them. We have reviewed them and we consider them
reasonable, fair and proportionate, and we therefore make an order that he pay
costs in that sum £1,144.
Chairman
Accountant Member
Accountant Member
Accountant Member
Non Accountant Member
Mr Peter Susman QC
Mr Nigel Atkinson FCA
Mr Lee Manning FCA
Mr David Ingram FCA
Ms Lesley Cartwright
010511
5
INVESTIGATION COMMITTEE CONSENT ORDERS
2
Mr Philippos Soteri FCA
Consent order made on 2 September 2015
With the agreement of Mr Philippos Kalli Soteri of 1160 High Road, London, N20 0RA, the
Investigation Committee made an order that he be severely reprimanded, fined £7,500 and pay costs
of £2,692 with respect to a complaint that:
1. Mr P K Soteri FCA advised Ms X that no tax was payable on the severance payment of
£75,000 she received from her former employer under a compromise agreement when this
was wrong.
2. Mr P K Soteri FCA advised Ms X to file a 2009-10 self assessment tax return when there
was no requirement for her to do one.
3. On or after 2 August 2010 Mr P K Soteri FCA filed Ms X’s 2009-10 self assessment tax
return when the tax return was wrong because he had included the employment income
from the 2008-2009 tax year.
4. On 14 June 2012 Mr P K Soteri FCA requested a First Tier Tribunal hearing with HMRC on
behalf of Ms X without her agreement.
5. Mr P K Soteri FCA failed to act in accordance with Section 240.2a of the Code of Ethics as
he did not provide Ms X with details of the basis of his fees.
6. Between 28 March 2013 and 15 October 2014 Mr P K Soteri FCA failed to respond to Ms
X’s letter of complaint.
023685
6
3
Mr Darren Harding ACA
Consent order made on 4 September 2015
With the agreement of Mr Darren Michael Harding of Ground Floor, 1-7 Station Road, Crawley,
West Sussex, RH10 1HT, the Investigation Committee made an order that he be severely
reprimanded, fine £5,750 and pay costs of £3,942 with respect to a complaint that:
That Mr Darren Harding ACA, on behalf of his firm, X Limited issued audit reports for each of
the clients set out below, causing his firm to be in breach of Audit Regulation 3.10, as the
audits had not been conducted in accordance with:
(a)
International Standards on Auditing (UK & Ireland) 230 ‘Audit Documentation’ in that the
firm failed to assemble the audit documentation in an audit file and complete the
administrative process of assembling the final audit file on a timely basis after the date of
the auditor’s report.
(b)
International Standards on Auditing (UK & Ireland) 300 ‘Planning an audit of financial
statements’ in that the firm failed to plan the audit so that the engagement was
performed in an effective manner.
(c)
International Standards on Auditing (UK & Ireland) 500 ‘Audit Evidence’ in that the firm
failed to obtain sufficient appropriate audit evidence to be able to draw reasonable
conclusions on which to base the audit opinion.
Ref
1.
2.
3.
4.
Client
A
B
C
D
Year end
31/12/12
05/04/12
31/08/13
31/12/12
Date of audit report
30/10/13
01/02/13
30/12/13
31/07/13
021973
7
REGULATORY DECISIONS
INSOLVENCY LICENSING COMMITTEE
ORDER – 24 AUGUST 2015
5
Publicity statement
On 24 August 2015, the Insolvency Licensing Committee ordered:
Mr Kevin Roy Mawer FCA, Forensic Recovery Limited, Marston House, Walkers Court
Audby Lane, Wetherby, West Yorkshire, LS22 7FD to pay a regulatory penalty of £500.00 for
failure to undertake a compliance review within a calendar year for 2014.
028337
All enquiries to the Professional Conduct Department, T +44 (0)1908 546 293
8