DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

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Elizabeth James
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1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Miss Emma Hoy Heard on: Monday, 15 May 2017 Location: The Chartered Institute of Arbitrators, 12 Bloomsbury Square, London, WC1A 2LP Committee: Mr Ian Ridd (Chairman), Mrs Andrea White (Accountant) and Mr George Tranter (Lay) Legal Adviser: Mr Alastair McFarlane Persons present and capacity: Ms Emily Healy (ACCA Case Presenter) Mr Richard Lorkin (Hearings Officer) Observers: Mr Lawrence Lui (ACCA Investigations Officer) Summary: Removal from the affiliate register with immediate effect 1. ACCA was represented by Ms Healy. Miss Hoy did not attend and was not represented. The Committee had before it a bundle of papers, numbered pages A to M, 1 30, and three service bundles numbered pages 1-23, and SERVICE/PROCEEDING IN ABSENCE 2. Having considered the service bundle, the Committee was satisfied that notice of the hearing had been served on Miss Hoy in accordance with the Complaints and Disciplinary Regulations 2014 ( CDR ).

2 3. The Committee next considered whether it was in the interests of justice to proceed in Miss Hoy s absence. The Committee accepted the advice of the Legal Adviser. The Committee was mindful that Miss Hoy had a right to attend the hearing and to participate and that the discretion to proceed in her absence must be exercised with the utmost care and caution. 4. The Committee noted that ACCA s letter, dated 10 April 2017, sent to Miss Hoy s registered address in Leicester, offered her the opportunity of attending via video or telephone link, with the costs being met by ACCA. Miss Hoy has not availed herself of this opportunity or made any response. It noted also that after Miss Hoy was sentenced by the Crown Court in April 2016, ACCA wrote to her about the matter on four occasions between April and June 2016, but received no response. In the light of these factors, the Committee was satisfied that Miss Hoy has voluntarily waived her right to attend this hearing. The Committee was not persuaded that any adjournment would increase the chance of Miss Hoy participating further in the case. On the information before it and bearing in mind its duty to ensure the expeditious conduct of its business and the wider public interest, the Committee was satisfied that it was in the interests of justice to proceed in the absence of Miss Hoy. The Committee reminded itself that her absence added nothing to ACCA s case and was not indicative of guilt. PRELIMINARY APPLICATION 5. Miss Healy made an application under Regulation 10(5) to amend Allegation 5 to include Allegation 3 as a basis for liability to disciplinary action by adding the words 3 and to Allegation 5(c). She explained that ACCA had simply omitted to include Allegation 3 in Allegation 5 and described it as an obvious oversight and was a typographical error. Miss Healy was unable to explain why this omission had not been addressed before today. 6. The Committee accepted the advice of the Legal Adviser. It noted that it has power to make the amendment if Miss Hoy is not prejudiced in the conduct of her defence. The Committee decided to allow the amendment as it considered overall that it was not unfair to Miss Hoy and did not prejudice her defence. The Committee noted that Miss Hoy is not present and is unaware of the application. ACCA could have noticed this error in advance

3 of the hearing and put Miss Hoy on notice of the proposed amendment. However, the substance of the allegation is set out clearly in Allegation 3 and, in the Committee s judgment, what is sought to be done by this amendment is a matter of technical linkage between the facts alleged and whether they are misconduct or render her liable to disciplinary action. It therefore did not consider that Miss Hoy s defence was prejudiced in any way and the public interest in the proper prosecution of the allegations required the amendment. BACKGROUND 7. Miss Hoy registered as a student of ACCA on 17 December 2003 and graduated on 8 August 2009, and as such is an affiliate. 8. In an , dated 6 October 2015, PC A of Leicestershire Police notified ACCA that Miss Hoy had been charged with fraud by abuse of position. PC A also informed ACCA that Miss Hoy received a caution for fraud in August 2012 (sic) but had continued to work as an accountant, albeit for a different company. 9. Having deferred its investigation pending the outcome of the criminal case ACCA ascertained in April 2016 that Miss Hoy had been sentenced for fraud by abuse of position on 1 April The caution related to Miss Hoy while working as an accountant taking a cheque from her then employers, Company A, and writing it out as payable to her boyfriend in August She admitted the offence and was cautioned by the police on 8 October The conviction related to Miss Hoy, while working as an accountant for Company B, creating fake invoices for amounts ranging from 275 to over 2,300, which were then paid into her account. Company B ascertained that between March 2013 and June 2015 Miss Hoy defrauded the company of 26, On 4 April 2016 Miss Hoy was sentenced at Leicester Crown Court for the offence of fraud by abuse of position. Miss Hoy was sentenced to a 12 month sentence of imprisonment, suspended for 18 months, and to a 100 hours unpaid work, to a supervision requirement for 12 months and

4 required to pay a victim surcharge of 100. The sentencing Judge stated that the case crossed the custody threshold and that Miss Hoy had acted deliberately, and commented that you by your actions were trying to hide your tracks by going back the computer (sic) and deleting some of the entries. Suspicion for a short time did fall on your fellow workers ACCA SUBMISSIONS Allegation 1 Proof of caution 12. ACCA submitted that the copy of the caution and police working sheet are conclusive proof of the caution and any facts found, pursuant to Bye-law 8(e). Allegation 2 Proof of conviction 13. ACCA submitted that the copy of the certificate of conviction is conclusive proof of the conviction and the facts thereof pursuant to Bye-law 8(e). Allegation ACCA relied upon the witness statement of Mr B, a Member s Support Administrator at ACCA, in support of their contention that Miss Hoy had not notified ACCA of a caution or conviction. Allegation 4 Failure to co-operate 15. ACCA submitted that Miss Hoy s failures to respond to ACCA amounted to a breach of her obligation to cooperate with her own professional regulatory body.

5 Allegation ACCA submitted that facts giving rise to the caution were sufficiently serious to amount to misconduct under Bye-law 8(a)(i) and that the conviction was for an offence discreditable to ACCA and the accountancy profession and rendered her liable to disciplinary action under Bye-law 8(a)(ix). Further, it submitted that she was liable to disciplinary action under Bye-law 10(b) for not bringing the caution for fraud and the conviction for fraud to the attention of ACCA promptly or at all. Finally, it submitted that Miss Hoy s failure to notify and to co-operate were both misconduct or both rendered her liable to disciplinary action pursuant to Bye-law 8(a)(iii). MISS HOY S SUBMISSIONS 17. Miss Hoy has not made any submissions and has not responded to any correspondence sent to her by ACCA. DECISION ON ALLEGATIONS AND REASONS 18. The Committee accepted the advice of the Legal Adviser. The Committee reminded itself that the burden of proving the factual allegations, rested upon ACCA. The standard of proof to be applied throughout was the ordinary civil standard of proof, namely the balance of probabilities. 19. The Committee reminded itself to exercise caution, as it was working from documents alone, in relation to the weight to be attached to evidence that was indirect or hearsay. DECISION ON FACTS 20. The Committee carefully considered all the oral and documentary evidence it had received, as well as the submissions of Ms Healy on behalf of ACCA. It noted that no case at all had been advanced by Miss Hoy.

6 21. The Committee was satisfied on the documentary evidence, including the Adult Offender Disposal Form which was a record of caution, that Miss Hoy accepted a police caution for the offence of fraud by false representation, contrary to section 2 of the Fraud Act 2006 on 8 October The Committee was satisfied by virtue of the certificate of conviction, that Miss Hoy was convicted of fraud by abuse of position contrary to section 4 of the Fraud Act 2006 at Leicester Crown Court on 4 December Further, the Committee had no doubt that such an offence involving dishonesty and breach of trust in relation to an employer was an offence discreditable both to the accountancy profession and to ACCA for an accountant to have committed. Accordingly, it was satisfied that Allegation 2 was proved. 23. The Committee accepted the evidence of Mr B, a Member s Support Administrator at ACCA to the effect that Miss Hoy did not notify ACCA of either her caution or conviction. Further, it was satisfied under Bye-law 10 (b) that Miss Hoy had a duty to bring the caution and the conviction to ACCA s attention promptly, and that by not doing so she breached this Bye-law. Accordingly, it was satisfied that Allegation 3 was proved. 24. The Committee was prepared to draw the inference that Miss Hoy received the s and the letter referred to in Schedule A to Allegation 5. Miss Hoy had provided this address to ACCA. There was no evidence the s bounced back. It was satisfied that it was reasonable to infer that she opened and read them. In relation to the letter, while it considered the inference to be less strong, it was nonetheless prepared to make it. The Committee noted that the letter, dated 15 June 2016, was sent to an address provided by the police officer, relatively shortly before. The Committee inferred that the s and the letter were received and would have been read by Miss Hoy. It was therefore satisfied that she was aware there was an investigation into her by ACCA and that she was under a duty to co-operate with it. The Committee accepted from the documentary evidence before it that at no stage had Miss Hoy cooperated with ACCA s investigation into the complaints against her in that she had not responded to any of ACCA s correspondence requesting the

7 information set out in Schedule A. The Committee was satisfied this was contrary to the obligation upon her pursuant to Paragraph 3(1) of the Complaints and Disciplinary Regulations Accordingly, it was satisfied that Allegation 4 was proved. LIABILITY TO DISCIPLINARY ACTION AND MISCONDUCT 25. The Committee first considered whether the proved Allegation 1 was sufficiently serious to render Miss Hoy guilty of misconduct pursuant to Bye-law 8(a)(i) (as applicable in 2011). The Committee had regard to the definition of misconduct in Bye-law 8(a)(i)(a) and the assistance provided by the case law on misconduct. It was satisfied that Miss Hoy s actions brought discredit on her, the Association and the accountancy profession. It was satisfied that defrauding her employer of monies was deplorable conduct and reached the threshold for a finding of misconduct. 26. The Committee was satisfied that the proved conviction in Allegation 2 rendered Miss Hoy liable to disciplinary action pursuant to Bye-law 8(a)(ix). 27. The Committee was satisfied that the proved failure to notify ACCA of the caution and the conviction in Allegation 3 was sufficiently serious to amount to misconduct pursuant to Bye-law 8(a)(i). Miss Hoy had an obligation to notify ACCA of the caution. She did not do so and, in effect, this allowed her to work in a new accountancy firm. Miss Hoy also was under an obligation to disclose her conviction to ACCA. Her failure to do so was deplorable in the Committee s judgment as it frustrated her regulator timeously undertaking its duty to protect the public and maintain the reputation of the profession. The Committee was therefore satisfied that the failure was misconduct and it therefore did not proceed to consider the alternative of liability to disciplinary action. 28. In relation to the proved failure to co-operate in Allegation 4, the Committee was mindful of the definition of misconduct and the assistance to be gleaned from the case law. The Committee was satisfied that it is a fundamental obligation on a member to co-operate with its regulator. It was satisfied that the cumulative, repeated failures by Miss Hoy to engage

8 with her regulator at all were so serious that it did reach the threshold for misconduct. Accordingly, the Committee did not go on to consider the alternative of liability to disciplinary action pursuant to Bye-law 8(a)(iii). SANCTIONS AND REASONS 29. The Committee noted its powers on sanction were those set out in Regulation 13(3). It had regard to ACCA s Guidance for Disciplinary Sanctions and bore in mind that sanctions are not designed to be punitive and that any sanction must be proportionate. It accepted the advice of the Legal Adviser. 30. The Committee considered Miss Hoy s conduct in stealing or attempting to steal from two separate employers to be very serious. To have repeated her dishonest conduct between 2013 and 2015 with a second employer when she had already been cautioned for similar conduct in 2011, significantly aggravated the seriousness of her behaviour. Further aggravating factors were Miss Hoy s attempt to cover up her deception in 2015 and her failure to accept her responsibility to her regulator or to engage with her regulator at all. In addition, the Committee had specific regard to the public interest and the necessity to declare and uphold proper standards of conduct and behaviour. Trust and honesty are fundamental requirements of any professional. Dishonesty by a member of the accountancy profession undermines its reputation and public confidence in it. 31. The Committee also noted that Miss Hoy has not apologised or expressed any remorse to ACCA. It was satisfied that Miss Hoy has demonstrated no insight into the seriousness of her behaviour or the impact of it on the reputation and standing of the profession. The only mitigating factor that the Committee could find, was that Miss Hoy had admitted the caution to the police and pleaded guilty at the Crown Court and had no previous disciplinary record. However, beyond this, the Committee has seen no evidence of any insight or understanding into the seriousness of her behaviour. There was no evidence of any corrective steps. The Committee considered the lack of any evidence of insight or

9 understanding to be an aggravating factor. A further aggravating factor was that the behaviour was planned and sustained. 32. Given the Committee's view of the seriousness of her conduct, it was satisfied that the sanctions of No Further Action, Admonishment, Reprimand and Severe Reprimand were insufficient to highlight to the profession and the public the gravity of the proven conduct. 33. The conduct involved dishonesty and there was no evidence before the Committee of any understanding and insight into the seriousness of such behaviour and the consequences of it for the reputation of the profession. The Committee determined that Miss Hoy s behaviour was fundamentally incompatible with her remaining on the affiliate register of ACCA and considered that the only appropriate and proportionate sanction was that she be removed from that register. The Committee further considered that the matters were so serious that it also directed that no application for readmission should be considered until the expiry of five years after the effective date of the order. COSTS AND REASONS 34. ACCA claimed costs of 7,477.28, based on a standard assessment of what work this case had involved. The Committee decided that it was appropriate to award costs in this case, and that the sums claimed were reasonable for work reasonably undertaken. It did however make a small adjustment for the fact that the case lasted only half a day as opposed to the full day listed. It accordingly reduced the figure to 7,250. While it was possible to make some inference that Miss Hoy has had financial difficulties in the past, there was no current information from Miss Hoy as to her means and disposable income, despite her having been invited to provide this information. It concluded that the sum of 7,250 was appropriate and proportionate. Accordingly, it ordered that Miss Hoy pay ACCA s costs in the amount of 7,250.

10 EFFECTIVE DATE OF ORDER 35. This order shall take effect immediately. The Committee was persuaded that it was in the interests of the public under Regulation 20(1)(b) to impose an immediate order, given the seriousness of the facts of this case and that the issue of public protection is primarily involved. Mr Ian Ridd Chairman 15 May 2017

HEARING HEARD IN PUBLIC

HEARING HEARD IN PUBLIC CROOK, Stacey Registration No: 199655 PROFESSIONAL CONDUCT COMMITTEE AUGUST 2017 Outcome: Erased with Immediate Suspension This case was heard in parallel with the case of MOLLOY,