Complaints Oversight Committee. Operations report 2006

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Gordon Chambers
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1 Complaints Oversight Committee p1

2 Content Introduction 1 Complaint handling process 2 Work completed 4 Members of the 5 Introduction 1. The Hong Kong Institute of Certified Public Accountants is the statutory licensing body for accountants in Hong Kong and is responsible for the professional training, development and regulation of the accountancy profession. 2. One of the duties of the Institute in regulating the professional conduct and standards of its members is to deal with complaints against members. The Professional Accountants Ordinance (PAO) empowers the Institute to investigate complaints and to take disciplinary action if proven. Complaints may be made against a certified public accountant, a member firm or corporate practice and a registered student. 3. The Council of the Institute established the in 2005 to:- (a) oversee the Institute s complaints handling process. (b) provide independent advice on policies, priorities and resource allocation in dealing with complaints. (c) conduct regular reviews of the adequacy and appropriateness of the complaint handling procedures. (The terms of reference of the Committee are available at hk/professionalcompliance/complaints/ COC_TOR.pdf ) 4. Members of the Committee include certified public accountants and lay persons. Members of the Committee are drawn from the bigfour accounting firms, small and medium size accounting practices, professional accountants in business and the public sector, retired members, practitioners in taxation, insolvency and lawyers. Members of the Council of the Institute do not sit on the Committee since complaints are ultimately reported by the Committee to the Council for resolution. 5. This report sets out the salient features of the Institute s complaint handling process, the work of the Committee in 2006 and the composition of the Committee. 1

3 Complaint handling process Overview 6. The Institute considers all complaints concerning its members, regardless of their source. For a complaint to be valid it must be adequately supported by evidence that is sufficient to reveal the possibility of wrongful acts having been committed by a member. 7. The PAO sets out the formal procedures to be followed when a complaint is made against a member. The By-laws contain similar procedures to be followed when a complaint is being made against a registered student. 8. With effect from 16 July 2007, the Financial Reporting Council (FRC), an independent statutory body, is empowered to investigate complaints regarding suspected irregularities involving auditors and reporting accountants of listed entities. It may also enquire into financial reports of listed entities if it suspects those reports may not comply with a relevant legal, accounting or regulatory requirement. 9. Complaints are initially handled by officers of the Compliance Department of the Institute. The Committee meets regularly to consider reports on complaints prepared by the case handlers and make recommendations to the Council of the Institute as to how such complaints should be dealt with. Process 10. On receipt of a complaint, an officer of the Compliance Department is assigned as case handler to conduct any enquiries and assess the sufficiency of evidence to support the complaint. The Compliance Department has established internal procedures that guide the case handler as to how a complaint should be processed. 11. The established procedures for handling complaints are designed to enhance fairness, transparency, efficiency and consistency. Such procedures include: (i) screening for any possible conflict of interest on the part of any Committee member; (ii) filtering out unsubstantiated complaints and those outside the jurisdiction of the Institute at an early stage in the process to facilitate the efficient use of resources; (iii) referring the details of the complaint to the member complained against for comment, in appropriate circumstances; and (iv) assessing the sufficiency of available evidence and determining whether there appears to be a case to answer. 2

4 12. After completion of any necessary enquiries and assessment, the case handler will prepare a report on each complaint detailing the background of the case, the subject matter of the allegations, the procedures followed and the conclusions of the case handler, for consideration by the Committee. 13. Having considered the report by the case handler, the Committee will make a recommendation to the Council. Recommendations may include: (a) dismissing the complaint if it is unfounded, or not adequately supported by the available evidence; 14. The PAO provides that, in the event that a complaint is dismissed, the aggrieved complainant may request the Council of the Institute to refer the matter to a Disciplinary Committee to hear the matter. The Council shall, unless it is of the opinion that no prima facie case has been shown for the complaint, or that the complaint is frivolous or vexatious, refer the complaint to a Disciplinary Committee. (A flowchart illustrating the complaint handling process for a typical complaint is available at professionalcompliance/complaints/complaint _process_flow_chart.pdf) (b) (c) (d) issuing a letter of disapproval, which will be kept on the record of the member at the Institute; r eferring the complaint to an Investigation Committee where statutory powers of investigation are necessary; and referring the complaint to a Disciplinary Committee to pursue disciplinary action against the member. Process review 15. The Committee commenced a review of the complaints handling process in 2006 and expects to complete this task and report its recommendations to the Council by the end of this year. 3

5 Work completed 16. In 2006, the Committee held 10 meetings to consider complaints. Complaints received before January 2005 were given priority. 17. Complaints handled in 2006: Cases brought forward from December 2005 New cases in 2006 Case load Cases completed in 2006 Cases in progress Source of Complaints Regulators Public Total (3) (61) (64) Categories of complaints received in 2006: Non-compliance with professional standards or statutory requirements Misconduct, dishonourable conduct Improper advertising/promotional activities Others: commercial disputes, quality of service and requests for assistance % Results of completed cases are as follows: Recommendations Dismissed due to insufficient evidence, allegations not falling within the Institute s jurisdiction or not pursuable Issuance of letters of disapproval Referral to other regulatory committees of the Institute Referral to Disciplinary Panels Non-member cases (8 cases involving breaches of section 42 of the PAO were reported to the Police) No. of Cases Date: 18 September

6 Members of the in 2006 and 2007 Peter H.Y. Wong (Chairman) Albert Li (Chairman) John Lees (Deputy Chairman) Nicholas Allen Albert Chan Humphrey Choi (from June 2007) Peter Griffiths* Wallace Hong* Elizabeth Law Quinn Law H.M. Lam (to December 2006 # ) Stephen Lee Nelson Miu Alan Tang Christopher To* Nancy Tse Wong Kwai Huen * (to October 2006) Kenneth Young (*) Non-HKICPA member (#) Mr. Lam passed away in early 2007 Secretariat Patricia McBride, Executive Director R.A. Harrod, General Counsel Head of Compliance (to June 2007) Philip Hilliard, Director, Compliance (from July 2007) Jessie Ng Deputy Director, Compliance Peter Nip Assistant Director, Compliance This Operations Report is intended for general guidance only. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this Operations Report can be accepted by the Hong Kong Institute of Certified Public Accountants. This Operations Report is also available at the Institute s website 5

Compliance Operations Report 2015

Compliance Operations Report 2015 2 Table of contents Section Introduction 3 Regulating CPAs department Complaints 4 What is a complaint? Sources of complaints Process Professional Conduct Committee Statistics Page Disciplinary proceedings