The lie that is honesty within the accountancy profession, takes a turn in an article sent into Injustice Scotland, were the Report on the Financial Memorandum of the Legal Profession and Legal Aid (Scotland) Bill, issued by the Scottish Parliament Finance Committee saw their lack of understanding of the way in which ICAS - the Institue of Chartered Accountants of Scotland, regulates the accountancy profession.
Focussing particularly on the levels of complaints received against accountants in Scotland - the Scottish Parliament Finance Committee seems to think there are a low level of complaints against Chartered Accountants in Scotland, noting the following in their report :
6. Decreasing number of complaints in recent years: from 239 in 1998 to 56 in 2005; thought largely to tightening up of professional standards.
Well, the fact of the matter is there are a great many more complaints made each year against Scotland's 15,000 Chartered Accountants - it's just that Tom McMorrow's Department over at ICAS does such a great job of refusing many client complaints, fiddling the statistics, and making sure that client complaints either get buried, or in the most serious instances, paid off with a small sum .. that there is such a preposterously low figure of complaints noted for last year - 56.
How could there only be 56 client complaints against a profession of some 15,000 Chartered Accounants when there are over 5000 complaints a year against Scottish lawyers and other members of the legal profession ?
Doesn't such a figure sound a bit stupid, when it turns out that in quite a few of the complaints made to the Law Society of Scotland about crooked lawyers - invariably, there turns up a crooked accountant somewhere in the complaint too, who has either been working with the crooked lawyer, or fiddling the financial evidence so the lawyer gets off the hook from the client complaint ?
Some could be forgiven for thinking it's a bit strange the Scottish Parliament Finance Committee could be so stupid in their determination of such a matter ... but perhaps the dark hand of ICAS is more responsible for that - as ICAS have a lot of influence, politically, at the Scottish Parliament - having regular behond-the-scenes meetings with politicians and "access when it wants" - as one senior member of the Scottish Parliament staff put it, in a disclosure on the heavy influence of ICAS and the pressure it exerts on msps & others at the Parliament.
One such a complaint, brought to the attention of our very own Peter Cherbi, saw the Director of Legal Services, Tom McMorrow, clam up on a complaint raised by a deceased client's wife, which saw her accountant cashing cheques in her dead husband's name.
What was done about it ? Nothing ... and even, strangely enough, the Bank involved in this case, did nothing either.
How could a dead man sign cheques for tens of thousands of pounds and the accountant receive the money ? - and that when the complaint was made, all efforts were made to bury the matter so nothing ever happened, and there was no media attention ?
Yes .. it's strange indeed, the Scottish Parliament has such an unusually idiotic and ignorant percepton of the Institute of Chartered Accountants of Scotland - but there again - maybe, just maybe - this is the paid-for-view which the power & influence of the accountancy profession in Scotland has purchased ...
Read on for an excerpt from the Finance Committee's report on their quite wrong assumptions into how 'honest' accountants in Scotland are - and our thanks at Injustice Scotland go to the [unnamed] senior staffer at the Scottish Parliament who sent us some material on this .. as well as interesting details on cases where constituents have asked their msps to do something about their crooked accountants ...
http://www.scottish.parliament.uk/business/committees/finance/reports-06/fir06-lpla.htm
5.0 COMPARATOR PROFESSIONS
5.1 Institute of Chartered Accountants of Scotland
5.1.1 ICAS has 15,000+ members, who are mainly (80%) employees rather than in private practice. Recently, there has been a significant increase in student members, especially located in England; thought to be due to quality of training and education provided by ICAS.
5.1.2 Not all accountants are members of ICAS; name ‘accountant’ is not legally protected. However, term ‘Chartered Accountant’ is reserved to members of ICAS, founded in 1854 by Royal Charter. ICAS is not ‘generally able to intervene in legal disputes between a client and their CA’ (ICAS, Complaints against Chartered Accountants, 2001: 5.18). ICAS requires practising members to take out Professional Indemnity Insurance (5.3). Fee Arbitration Service uses CA arbiters appointed to act as Auditors of Fees (7.1).
5.1.3 Where complaints cannot be resolved by conciliation, they are referred to the Investigation Committee (9.1), which is made up of CA and lay members. Having lay members began in late 1980s, when ICAS went to Scottish Consumer Council. In a committee of 20, around 7 are lay members. These are ‘people from other walks of life who ensure that the Committee deals fairly and even-handedly with every complaint’ (9.1). Adverts are placed in newspapers; lay members are paid a per diem fee. Discipline Committee also has a number of lay members, and functions similar to a court or tribunal. ICAS also advertises for lay members of Council; council members cannot sit on Investigations Committee or Discipline Committee.
5.1.4 Lay members mainly come from law and related professions (e.g. former police officers). ICAS looks for qualified lay members according to matrix of skills required e.g. of small businesses or whatever.
5.1.5 ICAS Response to Professional Oversight Board for Accountancy (POBA) report entitled ‘Complaints and Discipline Procedures Review’.
1. For 20 years, ICAS has had an arbitration scheme (Auditor of Fees); not independent, being administered by ICAS and featuring only ICAS members as arbiters; deals only with fee-related complaints.
2. The paper takes a robust attitude to ‘growing regulatory burden’, and its response to POBA recommendation is ‘underscored by the belief that the reparation or compensation culture (an important subsidiary of the ‘Complaints Industry’) that has rapidly permeated society militates against enterprise and has tipped the balance unfairly against professional of every kind.’
3. ICAS proposes three stages to Alternative Dispute Resolution (ADR): in-house conciliation; external mediation; and external arbitration (note that arbitration only follows mediation). It does not believe that ICAS has responsibility to resolve disputes where internal conciliation fails. It supports independent administration of mediation, away from ICAS, and at no cost to it. Arbiters therefore should not be given powers to compensate, and calculation of consequential loss should not fall within arbitration scheme; ‘There is no substitute for the Courts in this respect’.
4. ‘ … any complaint that cannot be settled by secretariat conciliation in the first instance, must not be remitted to a mechanism that begins to erode the private law position of the member against the client. For that reason alone, members should not be compelled to remit disputes involving clients to arbitration. The mediation mechanism that ICAS proposes is the optimum from the point of view of keeping private law positions of member and client as equal as possible.’ (p.6)
5. ICAS is also concerned that POBA would prefer a single scheme in which all accountancy bodies are participants, and which would almost certainly be run from London. ‘ICAS does not believe a dissatisfied client in Scotland would willingly cede authority for the conduct of his case by someone at so far a geographical remove … In any event, contracts between clients and members which are performed in Scotland are therefore governed by Scots Law.’ (p.6)
5.1.6 General Observations:
1. in 2005, failure of proposed amalgamation of ICAEW and CIPFA, and opposition to ICAEW name-change to ICA (Jack McConnell also voiced opposition, as did Australian body)
2. ICAS: complaints about individual members (E & W complaints against firms; also has schedule of penalties; ICAS doesn’t); ICAS does not have powers to compel witnesses to give evidence.
3. POBA gave ICAS a clean bill of health. Powers to suspend members are being beefed up at moment.
4. ICAS has no equivalent of Guarantee Fund.
5. ICAS does not have tribunals established by statute; it is inspected by DTI and Insolvency Service.
6. Decreasing number of complaints in recent years: from 239 in 1998 to 56 in 2005; thought largely to tightening up of professional standards.
7. New rules being negotiated via Privy Council (governed by Royal Charter slows things down); ‘polluter pays’ scheme being introduced. There will be an additional levy to pay for this. New joint disciplinary scheme with ICAEW.
8. Setting up of Accountancy Investigation and Disciplinary Board (AIDB), POBA successor to Review Board.
9. ICAS seems based on model of private professions who are largely self-regulating, but with lay members on committees; no suggestion of state regulation; autonomous and independent body from ICAEW (competitive?); jealous of independence; seems quick on its feet. It has managed to reduce significantly number of complaints against its members over the years, and to expedite these.
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