DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

Transcription

1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Ms Nian Liu Heard on: 14 January 2016 Location: Committee: Legal Adviser: Chartered Institute of Arbitrators, 12 Bloomsbury Square, London WC1A 2LP Mr Mike Cann (Chairman), Mr Graeme Patrick (Accountant), Mr Garrett O Reilly (Lay) Mr Andrew Granville Stafford Persons present and capacity: Mr Hamish Common (ACCA Case Presenter) Ms Kathryn Reece (Committee Officer) Observers: None INTRODUCTION 1. The Disciplinary Committee of ACCA ( the Committee ) convened to consider a report concerning Ms Nian Liu. The Committee had before it a bundle of papers (pages 1 to 86) and a service bundle (pages 1 to 13). PROCEEDING IN ABSENCE AND PRELIMINARY ISSUES 2. The Committee considered the service bundle which contains a notice of hearing dated 27 November 2015, a print out of Ms Liu s registered address and proof of postage. Royal Mail s Track and Trace showed the letter had been delivered on 4 December Ms Liu replied by on 23 December 2015 saying she was not going to attend and she had nothing further to add to her previous correspondence which she requested should be taken into account by the Committee. 3. The Committee was satisfied that notice of today s hearing was sent to Ms Liu by Royal Mail International Signed post on 27 November 2015 to her registered address. Therefore the notice had been sent sufficiently in advance of this hearing to the correct address to comply with the regulations. The issue for the Committee was whether the notice itself was in correct form. 1

2 4. Regulation 10(1)(b) of the Chartered Certified Accountants Complaints and Disciplinary Regulations 2014 ( the Disciplinary Regulations ) states that the notice of hearing shall specify... the allegation(s) under consideration. The notice of hearing sent to Ms Liu reads: The allegations that have been referred to the Disciplinary Committee are those set out on pages 1 to 86 of the enclosed blue bundle of papers. 5. It is unfortunate that in this case there are two versions of Allegation 1 contained in those pages. The version on page 1 ( the old version ) reads: Pursuant to bye-law 8(a)(i) it is alleged that Ms Liu is guilty of misconduct by reason of possessing unauthorised materials, which she intended to use to gain an unfair advantage, during an examination on 5 December 2012, contrary to Examination Regulation 7, and/or the Fundamental Principle of Integrity, as applicable in The version on page 5B ( the new version ), which is headed Amended Schedule of Allegations, reads: 1(a) Pursuant to bye-law 8(a)(i) it is alleged that Ms Nian Liu is guilty of misconduct by reason of possessing unauthorised materials, which she intended to use to gain an unfair advantage, during an F7 examination on 5 December 2012, contrary to Examination Regulation 7. 1(b) Ms Nian Liu s conduct in respect of Allegation 1(a) above is i. Dishonest ii. Contrary to the Fundamental Principle of Integrity. 7. The Committee was also referred to a letter dated 10 September 2015 which told Ms Liu that ACCA is amending the allegations, setting out the new version, and asking her to respond to the additional allegation of dishonesty. Pursuant to Regulation 8(1)(b) of the Disciplinary Regulations as in force in 2015, ACCA may amend any allegation prior to the notice of hearing being sent out provided there is no unfairness to the member. This is clearly the power ACCA was intending to exercise by virtue of this letter, because Ms Liu is asked in the letter whether she objects on the grounds that the amendment will be unfair or prejudicial to her. 2

3 8. Ms Liu responded on 23 September 2015 by re-iterating her case that she had been negligent and disputing that she had been dishonest. She did not, however, contend that she had been prejudiced by the amendment. Mr Common contended on behalf of ACCA that there was no unfairness because, in light of the decision in the case of R (May) v CIMA, breaching the Fundamental Principle of Integrity is synonymous with acting dishonestly. The Committee accepted that, given that ACCA s was effectively contending she cheated in an exam and was therefore dishonest, it was fairer to have this allegation spelt out. 9. The issue for the Committee was whether the requirement that the notice shall specify the allegations has been met in these circumstances. The Committee considered it far from desirable that this issue has arisen. It was not clear why the allegations themselves could not have been included in the notice of hearing letter or, alternatively, the notice could not have specified that the allegations that ACCA intended to proceed on were the new rather than the old version. 10. The Committee was however satisfied in the circumstances of this case that the words used in the notice in conjunction with the attachments to it had sufficiently spelt out to Ms Liu that the allegations she faced were the new version. The Committee was therefore satisfied that the requirements of regulations 10(1) as to service had been complied with. 11. The Committee went on to consider whether to proceed in the absence of Ms Liu. The Committee bore in mind that the discretion to do so must be exercised with the utmost care and caution. It is clear from her of 23 December 2015 that Ms Liu is aware of the hearing and that her decision not to attend was a voluntary one. She has given her account in correspondence and the Committee will consider that in reaching its decisions in the case. No useful purpose would be served by adjourning. Nor would it be either in the public or Ms Liu s own interest to further delay the determination of this case. ALLEGATIONS AND BRIEF BACKGROUND 12. The allegations against Ms Liu are as follows: Allegation 1 1(a) Pursuant to bye-law 8(a)(i) it is alleged that Ms Nian Liu is guilty of misconduct by reason of possessing unauthorised materials, which she 3

4 intended to use to gain an unfair advantage, during an examination on 5 December 2012, contrary to Examination Regulation 7. 1(b) Ms Nian Liu s conduct in respect of Allegation 1(a) above is i. Dishonest ii. Contrary to the Fundamental Principle of Integrity. Allegation 2 Pursuant to bye-law 8(a)(iii) it is alleged that Ms Nian Liu is liable to disciplinary action by reason of possessing unauthorised materials during an examination on 5 December 2012, contrary to Examination Regulation Ms Liu is a student member of ACCA, having been admitted to student membership on 18 August 2008, and is resident in China. On 5 December 2012 she attended an examination centre in Tianjin, China to sit the F7 examination. 14. At 5.08pm, two hours in to the exam, the supervisor seized a small pink ruler that Ms Liu had in her desk. The back of the ruler had writing on it. An examiner has examined the ruler and states: The notes are a list of formula of commonly used accounting ratios. These were examined as part of question 3 worth 9 marks. The candidate attempted this question first and scored 7/9, by far the best performance on a part of a question within the script. There is the possibility that the notes helped the candidate in a limited way. 15. Ms Liu signed an SCRS2 form after the exam which says 'Bring ruler for use in exam, wording not for this exam paper. 16. In an to ACCA on 6 February 2013 Ms Liu said 'The unauthorised material was caused by my negligent and I did not intend to cheat in the exam as I knew the behavior of cheating is definitely against what a professional accountant should be. The unauthorised material was written when I did the revision of the exam. She went on to explain that she was extremely busy at work and had written 'quick notes' everywhere, even on her building entry card, so she could easily look them up. She went straight from a client to the exam. Due to time pressure she forgot to check her stationary. 4

5 17. Ms Liu said in this that the reason she used the ruler in the exam was to ensure she did not miss a line of print. She used it in every exam. The ruler was left on her desk, where the supervisor could clearly see it. She knew that all stationary would be checked. If she had intended to cheat, she said, she would put the ruler somewhere where the supervisor could not see it. Also she said if it had been her intention to cheat she would have transferred the notes on to her exam paper at the start of the exam and rubbed them off the ruler. She admitted she had been careless and apologised for the inconvenience and trouble caused. 18. In a further to ACCA on 4 November 2014, Ms Liu pointed out that neither the supervisor or the invigilator claimed to have seen her using the ruler during the exam and nor, she said, did she. She said that her marks for the first three questions she attempted were fairly even and therefore disputed the assertion that she had done far better on question 3. DECISIONS ON ALLEGATIONS AND REASONS 19. The Committee considered the documents before it, the submissions of Mr Common on behalf of ACCA and the advice of the Legal Adviser. The Committee bore in mind that the burden of proving an allegation rests on ACCA and the standard to be applied is proof on the balance of probabilities. However, where a student is found to be in possession of unauthorised material during an exam which is relevant to it the burden is reversed and the student is presumed to have intended to use the material to gain an unfair advantage unless the contrary is proved (Exam Regulation 8). 20. The Committee accepted that Ms Liu had at her desk during the exam a small ruler on the back of which accounting formula had been written. Indeed, this is not disputed by Ms Liu. Therefore there is no doubt that she was in possession of unauthorised materials in the exam. The Committee also accepted that the formula were relevant to this particular exam, taking in to account the examiner s report and Ms Liu s own admission that she was careless in bringing the ruler in to the exam and she used things like this as revision aids. 21. Therefore, applying Exam Regulation 8 (as in force at the time), the Committee must assume that Ms Liu intended to use the notes on this ruler to gain an unfair advantage unless she proves, on the balance of probabilities, that she did not so intend. On the facts of this case, Mr Liu has failed to discharge that burden. 5

6 22. Of significance, in the Committee's view, is that notes were very small, written in pencil and on the back of an item which would not necessarily raise suspicion if the student was seen using it during the course of the examination. This is more consistent with being an aid to cheating rather than a method of revision. It is also of note that, on the day of the exam, her explanation was that the formula were not relevant to this particular paper. That is clearly not correct and is not an explanation she has subsequently rehearsed. Moreover, she did do rather better on the first part of question 3, in respect of which the formula would be relevant, than on the rest of the paper. Whilst the Committee accepts that a candidate is likely to do their best question first, that is not inconsistent with using the ruler to cheat on that question. 23. Therefore the Committee finds that, in breach of Exam Regulation 7, Ms Liu brought this ruler in to the exam with the intention of gaining an unfair advantage. 24. The Committee was in no doubt that cheating or attempting to cheat in an examination is both dishonest and a breach of the Fundamental Principle of Integrity. The Committee was satisfied that bringing revision notes in to an exam room concealed on the back of ruler would be regarded as dishonest by ordinary and reasonable members of the public and, moreover, Ms Liu must have appreciated this. The Committee accepted the advice of the Legal Adviser that, in light of R (May) v CIMA, having found she acted dishonestly it must also find Ms Liu breached the Fundamental Principle of Integrity. Furthermore, such behaviour is clearly discreditable to Ms Liu and to the profession and therefore amounts to misconduct. 25. The Committee therefore finds Allegation 1 proved. As Allegation 2 is a lesser alternative, there was no need for the Committee to consider Allegation 2. SANCTION AND REASONS 26. The Committee considered what sanction, if any, to impose taking into account ACCA s Guidance for Disciplinary Sanctions ( GDS ) and the principle of proportionality. The Committee bore in mind that the purpose of sanctions was not punitive but to protect the public, maintain confidence in the profession and declare and uphold proper standards of conduct and behaviour. Having found that Ms Liu s actions amounted to misconduct, taking no further action was clearly not appropriate. The Committee therefore considered the available sanctions in ascending order of seriousness. 6

7 27. The Committee took into account that Ms Liu had engaged with the disciplinary process. She had made an apology for her actions, but that had to be weighed against the fact that she had not made any admissions in respect of her misconduct. 28. Ms Liu s actions were not only a very serious departure from proper and acceptable standards, but were quite deliberate. Therefore it was, in the Committee's view, inappropriate to admonish or reprimand Ms Liu. 29. The GDS makes it clear that misconduct in relation to examinations, and in particular possession of unauthorised materials with intent to gain an unfair advantage, is bound to be regarded by any Committee as very serious. The Committee also considered that any dishonesty undermines trust and confidence in the profession and that a severe reprimand would not mark the seriousness of this conduct. 30. The Committee concluded that Ms Liu s actions in this case were fundamentally incompatible with being a student member of a professional association. They constituted a serious departure from relevant standards. The Committee did not feel that any order which allowed Ms Liu to retain her student membership of ACCA could possibly be justified. 31. Therefore the Committee made an order under regulation 13(3)(a) of the Disciplinary Regulations removing Ms Liu from the student register. 32. The Committee did not consider that it was appropriate to additionally make an order restricting Ms Liu s right to apply for readmission, particularly in light of the fact her student career would have effectively been on hold during the lengthy period it has taken to bring this allegation to a hearing. Therefore Ms Liu will be able to re-apply for student membership after 12 months. COSTS AND REASONS 33. ACCA applied for costs against Ms Liu in the sum of 2,295. The Committee considered that in principle, having found this allegation proved, it should make a costs order in ACCA s favour. 34. The Committee were not provided with any detailed breakdown of how this amount of costs had been incurred nor any evidence, such as a timesheet, which would justify the claim. In the absence of such information, the Committee could not be satisfied that these costs had been properly incurred or that they were reasonable given the complexity of the case. Moreover, it could not escape the Committee's attention that 7

8 in all four of the cases listed for hearing today and tomorrow the claim for costs is in exactly the same amount. 35. The Committee decided that, given the lack of detailed information supporting this claim for costs, the appropriate course was to allow 1,150 in respect of costs. There Committee ordered Ms Liu to pay ACCA s costs in the sum of 1,150. EFFECTIVE DATE OF ORDER 36. The Committee determined that it would be in the interests of the public for the order to take immediate effect. Therefore, pursuant to Regulation 20 of the Disciplinary Regulation, the order removing Ms Liu from student membership will take effect immediately. PUBLICITY 37. This decision will be publicised in accordance with Regulation 11(3)(b) of the Disciplinary Regulations. Mr Mike Cann Chairman 14 January