Indicative Sanctions Guidance

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Eric Waters
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1 Indicative Sanctions Guidance 1

2 Contents 1. Introduction Purpose General principles Sanctions... 3 In the case of all members, regardless of membership type... 3 In the case of full and fellow members, but not students... 5 In the case of fellow members only... 6 In the case of students but not full and fellow members Aggravating factors Mitigation Costs Time limits Publication... 9

3 1. Introduction 1.1. This guidance has been designed by AAT to assist the Disciplinary Tribunal ( Tribunal ) in its determination on sanction after a member has been found to be guilty of misconduct in accordance with the procedures as set out in the Disciplinary Regulations for members ( the Disciplinary Regulations ) from time to time in force For the purposes of this document use of the term he is equally applicable to she. 2. Purpose 2.1. The Indicative Sanctions Guidance has been designed to promote consistency in decision making, but is not intended to substitute the judgement exercised by the Tribunal on the facts of any individual case It provides a platform upon which the Tribunal can make a determination as to the appropriate level of sanction to impose, in accordance with the general principles detailed in section 3 below This guidance should be used and referred to by the Investigations Committee or Investigations Team in considering a recommended order to propose to a member Any sanctions imposed by the Conduct & Compliance team have been decreed by Council and are contained wholly within the Policy on powers delegated to Conduct & Compliance by Council. 3. General principles 3.1. The Indicative Sanctions Guidance has been designed to promote consistency in decision making, but is not intended to substitute the judgement exercised by the Tribunal on the facts of any individual case It provides a platform upon which the Tribunal can make a determination as to the appropriate level of sanction to impose, in accordance with the general principles detailed in section 3 below This guidance should be used and referred to by the Investigations Committee or Investigations Team in considering a recommended order to propose to a member Any sanctions imposed by the Conduct & Compliance team have been decreed by Council and are contained wholly within the Policy on powers delegated to Conduct & Compliance by Council. 4. Sanctions 4.1. Under paragraph 40 of the Disciplinary Regulations, a number of sanctions are available to the Tribunal for consideration upon a finding of misconduct. The Tribunal at its discretion may impose one or more of the sanctions available to it. In the case of all members, regardless of membership type a) No further action (paragraph 40(c)) Where there is a finding of misconduct, only in rare cases would it be appropriate to 3

4 impose no sanction. This might be so if it was clear, for example, that the member was severely incapacitated at the time of the offence, or the impact on third parties or the reputation of AAT was minimal. Where the Tribunal decides not to impose a sanction, despite there being grounds to do so, it must give cogent reasons for its decision. b) Informal advice over behaviour (paragraph 42) In cases of minor breaches, where it has been decided that disciplinary sanction is not appropriate, the Tribunal may still issue informal advice to the member regarding future conduct. The Tribunal may suggest that the member seeks advice or developmental training from sources as may be recommended or prescribed. Given the informal nature of this order, it would not be appropriate to monitor compliance with the advice, and the Tribunal must be mindful of this when imposing this sanction. c) Reprimand (paragraph 40(a)(vii) in the case of full and fellow members and 40(b)(iv) in the case of students) A reprimand is the lowest formal sanction that can be applied and it may be appropriate where conduct is considered less serious, but the Tribunal wishes to make clear that the behaviour was unacceptable. The imposition of a reprimand might be accompanied with an undertaking that the behaviour should not be repeated, or a fine as is discussed below. A reprimand might be considered appropriate in cases where the Tribunal can be satisfied that there is no significant risk or damage to the public, the professional reputation of the individual member or AAT. d) Severe reprimand (paragraph 40(a)(vi) in the case of full and fellow members and 40(b)(iii) in the case of students) A severe reprimand may be appropriate where the misconduct is of a serious nature but the Tribunal is satisfied the circumstances are such that a lesser sanction is justifiable and will continue to ensure that the reputation of AAT is protected. The Tribunal might consider such aggravating issues as the ongoing (or original) level of risk to the public and to the reputation of AAT. It is a final warning. e) A fine not exceeding a maximum figure as Council might set from time to time (paragraph 40(a)(viii) in the case of full and fellow members and 40(b)(v) in the case of students) The maximum fine as set by Council is 5,000. A fine may be imposed as a standalone sanction or be combined with any other additional sanction, but the Tribunal should note that in cases where the matter is insolvency related, a fine will not normally be appropriate. The level of fine must reflect the gravity of the misconduct in question, but also be balanced against the member s means. For this reason when seeking to impose a 4

5 fine, the Tribunal should invite the member to make representations as to his means. Where the member chooses not to do so, the Tribunal is entitled to assume that his means do not justify a reduction in the amount they would seek to impose solely on the basis of the seriousness of the offence. f) A written undertaking to refrain from continuing or repeating the misconduct in question (paragraph 40(a)(ix) in the case of full and fellow members and paragraph 40(b)(viii) in the case of students) A written undertaking would normally be an appropriate additional requirement in those cases where a action short of expulsion or a declaration of incompatibility with full membership or withdrawal of student membership or removal of fellow membership is taken. Any written undertaking should be appropriate to the issues causing concern and proportionate to the impact of any action. The Tribunal should give due consideration to the implementation of a written undertaking and, for it to be effective, it has to be measurable and evaluated in some way. Additionally, if a written undertaking is to have an impact on future membership, the Tribunal should consider how the behaviour and performance of the member is subsequently to be reported to AAT. In the case of full and fellow members, but not students g) Declaration of ineligibility for a practicing licence (paragraph 40(a)(iv)) This may be coupled with the withdrawal of a practicing licence in the limited circumstances in which that sanction may be applied. It could also be applied when considering matters of gross incompetence against a member who is not a member in practice but may seek to be in the future. h) Suspension of membership (paragraph 40(a)(ii)) This equates in seriousness to expulsion. Where significant mitigation exists it may be appropriate to use suspension instead of expulsion. It is unlikely that suspension would be appropriate in isolation due to the fact that the passage of time in and of itself will be insufficient to remedy any breach of professional standards. i) Withdrawal of a practicing licence (paragraph 40(a)(iii)) Where a member holds a current practicing licence and misconduct has been established, the Tribunal should normally consider whether the member continues to be suitable to hold that practicing licence. There are very few circumstances where it would be appropriate to impose this as a standalone sanction. To do so, where that individual continues to be a member of AAT, puts them automatically in breach of the Guidelines and Regulations for Members in Practice which states under paragraph 7 that a member must not provide services unless they are licensed. In this case, the member would be left with no alternative but to cease practice or resign from membership. 5

6 j) Expulsion (paragraph 40(a)(i)) This is the most severe sanction available to the Tribunal for full and fellow members. This sanction would be appropriate where it is paramount to protect the public and/or confidence in AAT, wider membership or the accountancy profession as a whole. The issues under consideration will include: serious departure from professional standards abuse of position and/or trust dishonesty fraud a clear pattern of breaches of professional standards as set in AAT s policies, regulations and the Code of Professional Ethics. In the case of fellow members only k) Removal of fellow membership status (paragraph 40(a)(v)) Where misconduct is found against a fellow member, this sanction must always be considered in the interests of protecting the status of fellow membership. As senior and experienced members of AAT, often holding high profile positions in the public eye, AAT can reasonably expect exemplary conduct from its fellow members at all times in both a private and professional capacity. The Association sees its fellow membership as a status to aspire to. In cases of misconduct for fellow members the Tribunal might consider that due to the weight of expectation even a relatively minor breach should be managed with consideration of the likely impact on the public perception on AAT and the profession. If a fellow member has been found guilty of misconduct the Tribunal must consider the impact of this finding with regards to their continued fellow membership. In the case of students but not full and fellow members l) Have a relevant assessment result declared null and void (paragraph 40(b)(vii)) If misconduct is found in relation to a student s behaviour during an assessment, which has compromised the integrity of the award, the Tribunal must order that the result be declared null and void in order to protect the integrity of the qualification. If the Tribunal is satisfied that the misconduct is such that it should not prevent future membership, in which case this sanction should be used in conjunction with withdrawal of student membership, the student will be required to re-sit the assessment. m) Be debarred from sitting AAT s assessments for a period as shall be determined (paragraph 40(b)(vi)) The sanction may be used where the Tribunal considers that formal removal from the student membership is disproportionate, perhaps on the basis of any mitigation put 6

7 forward; however, the student should not be permitted to undertake assessments for a set period of time. This makes the sanction equivalent to suspension for student members and will lead to delay in completing their qualification. This sanction may typically be appropriate where a student member might have been declared bankrupt. Given the reputational impact to AAT, the Tribunal considers that those circumstances (particularly in relation to undischarged bankruptcy) are incompatible with student membership until discharge. n) Withdrawal of student membership (paragraph 40(b)(ii)) This sanction may be used where the Tribunal considers the nature of the misconduct to be of such a serious nature that formal removal of student membership is reasonable. This sanction will prohibit the student from continuing with their studies and is therefore one of the most severe sanctions the Tribunal might be minded to impose. o) Be declared unfit to become a full member (paragraph 40(b)(i)) This is the most severe sanction available to the Tribunal for student members. This sanction demonstrates that the student s actions contradict the fundamental principles of accounting ethics and that AAT will never be satisfied of their suitability to practice either in business or in private practice. If the Tribunal was minded to impose this sanction, it should consider it in conjunction with withdrawal of student membership. This is because the AAT Accounting Qualification is a conduit to full membership of AAT and can elicit exemptions for other accountancy qualifications with other accountancy bodies. Therefore it may be counter intuitive to declare a student unfit to become a full member due to a significant deviation from the fundamental principles, but allow them to continue with student membership and potentially allow them to practice with other professional bodies, or worse still, in the absence of scrutiny from any accountancy body. 5. Aggravating factors 5.1. Conduct and Compliance is permitted at paragraph 98 to make representations whether favourable or adverse to the member Aggravating factors will normally warrant a more severe sanction and usually demonstrate that the member s behaviour is incompatible with the fundamental principles of professional ethics to which all members of AAT are expected to comply Aggravating factors might include, but are not limited to: a. dishonesty b. harm (financial or otherwise) caused to a third party c. relevant disciplinary history d. lack of insight e. lack of remorse f. member s conduct through the proceedings (including failure to comply with the pre hearing protocol). 7

8 6. Mitigation 6.1. The member is permitted to make representations in respect of mitigation under paragraph 95 of the Disciplinary Regulations for members The Tribunal may place as much weight as it chooses to the mitigation put forward in respect of identifying a proportionate sanction Conduct and Compliance is not permitted to comment on the substance of the mitigation put forward except to correct errors of law or fact The mitigation might include, but is not limited to: a) remorse b) remedial action taken to address the misconduct c) personal factors d) ill health e) experience (or inexperience) f) previous good character g) early admission A member may also seek to introduce character references, or call witnesses to attest to their good character which is permissible. Should this be the case, these will need to be weighed appropriately against the nature of the incident Where a member chooses not to attend the hearing, they will be invited to make representations in respect of mitigation at the point they advise they do not intend to attend. If they choose to put in representations, these will be retained by the Secretary to the Tribunal and only presented upon a finding of misconduct against the member. 7. Costs 7.1. Paragraph 40(c)(i) gives the Tribunal the power to award costs against a member in respect of the costs incurred by AAT in bringing the case These costs may include: a) Conduct and Compliance s legal expenses b) witness expenses c) the costs of undertaking the investigation d) the costs of the Tribunal In determining the award for costs, the Tribunal must be mindful of the maximum amount set by Council (currently 15,000), and have due regard to the member s means as discussed above at paragraph 4.1(e) The member must be given the opportunity to make representations in respect of a costs application put forward by Conduct & Compliance. 8

9 8. Time limits 8.1. It is imperative that the Tribunal gives due consideration to the length of time a disciplinary sanction remains live on a member s record This is not relevant in relation to an assessment result being declared null and void, but will be relevant in the application of all other sanctions Where the Tribunal orders expulsion of a member or withdrawal of student membership, it should consider whether the sanction is applicable without exception, or whether they would propose a timescale upon which AAT might consider an application for re-admission If the Tribunal is minded to make such a recommendation, the guideline starting point is: a) for students members two years although this may be increased or decreased depending on the circumstances within a suggested range of 12 and 36 months. b) for full or fellow members three years although this may be increased or decreased depending on the circumstances within a suggested range of two to five years. c) Any timescale imposed by the Tribunal does not compel AAT to re-admit a member. Any such application would be considered in accordance with AAT s admission policy in force at that time. d) It would be appropriate for any reprimands to be time bound and imperative for the Tribunal to make a determination as to the timescale for any order in respect of suspension of a member or debarring from sitting assessments in the case of students. This will be solely at the discretion of the Tribunal based on the evidence before it and any relevant factors to the decision to take action short of expulsion or withdrawal of student membership. 9. Publication 9.1. In accordance with paragraphs 105 and 106 of the Disciplinary Regulations for Members the publication of any decision will be undertaken by AAT unless the Tribunal directs to the contrary Unless the Tribunal indicates otherwise, the information will state the name of the member, the nature of the misconduct and the decision of the Tribunal In some cases information may be withheld if its release might lead to the identification of third parties, particularly if the misconduct involved criminal activity and/or vulnerable individuals. This will be at the discretion of the Chair of the Disciplinary Tribunal and Conduct and Compliance Manager It will be normal practice for AAT to publicise the outcome of any disciplinary hearing on its website, membership publications, and to issue a general media press release as soon as is practicable. 9

Indicative Sanctions Guidance

Indicative Sanctions Guidance AAT is a registered charity. No. 1050724 Indicative Sanctions Guidance Contents Introduction... 3 Policy detail... 4 Sanctions... 5 Aggravating factors... 7 Mitigation...