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: Mr Dilshad Hussain Heard on: Tuesday, 19 September 2017 Location: The Chartered Institute of Arbitrators, 12 Bloomsbury Square, London, WC1A 2LP. Committee: Dr Jonathan Page (Chairman), Mr Gerard McClay (Lay) and Mr Martin Davis (Accountant) Legal Adviser: Mr Leighton Hughes Persons present and capacity: Mr Dilshad Hussain (Student, by telephone), Mrs Sadiqa Mubashir (Urdu interpreter), Miss Rachael Davies (Hearings Officer), Mr Matthew Kewley (Case presenter on behalf of ACCA) Observers: Mr Denzil Johnson (ACCA case Progression Officer) Summary: (i) Removal from the student register. (ii) Any application for re-admission to the student register must be referred to the Admissions and Licensing Committee.

2 1. The Committee had before it a hearing bundle paginated A-K and 1-55, an additional bundle paginated and a service bundle paginated Mr Hussain had all of these documents before him. 2. ACCA was represented by Mr Kewley. Mr Hussain attended by telephone link, through Mrs Mubashir, an interpreter in the Urdu language. THE ALLEGATIONS Allegation 1 (a) Pursuant to bye-law 8(a)(i) Mr Dilshad Hussain is guilty of misconduct by reason of causing or permitting the submission of a verification letter to ACCA on or around 9 October 2015 in support of his application for exemptions, which purported to show that he had passed six of the Institute of Chartered Accountants of Pakistan's modules when, in fact, he had not. (b) Mr Dilshad Hussain's conduct as set out in Allegation 1(a) was: i) Dishonest; ii) Contrary to the Fundamental Principle of Integrity Allegation 2 (a) Pursuant to bye-law 8(a)(i) Mr Dilshad Hussain is guilty of misconduct by reason of his failure to co-operate fully with the investigating officer during the course of the investigation, contrary to Complaints and Disciplinary Regulation 3(1), in that he failed to respond to any or all of the ACCA s correspondence requesting information on: i) 10 December 2015; ii) 6 January or

3 (b) Pursuant to bye-law 8(a)(iii) Mr Dilshad Hussain is liable to disciplinary action by reason of his failure to co-operate fully with the investigating officer fully during the course of the investigation, contrary to Complaints and Disciplinary Regulation 3(1), in that he failed to respond to any or all of the ACCA s correspondence requesting information on: i) 10 December 2015; ii) 6 January At the commencement of the hearing, Mr Hussain denied each of the allegations. THE BACKGROUND AND ACCA'S CASE 4. Mr Hussain was a student member of ACCA, having been registered as a student on 28 December ACCA's case was that on or around 9 October 2015, Mr Hussain caused or permitted the submission of a false verification letter to ACCA in support of an application for exemptions from ACCA examinations. The letter purported to show that he had passed six of the Institute of Chartered Accountants of Pakistan's modules when, in fact, he had not. ACCA alleged that in so doing Mr Hussain was guilty of misconduct and also was dishonest and in breach of ACCA's Fundamental Principle of Integrity. ACCA's case was further that, once informed of the investigation into the matter, Mr Hussain had failed to co-operate with the investigation. That was alleged also to amount to misconduct or, in the alternative, was at least sufficiently serious as to render Mr Hussain liable to disciplinary action. 6. On 6 October 2015, Mr Hussain changed his registered address from 1 to On 9 October 2015 an was sent from 2 to ACCA which stated as follows:

4 "Dear Sir/Madam, I am sending you my CA Pakistan verification report which state that I had completed CA inter and passed some papers of final level. Kindly tell me how much exemption I can avail on basis of this? Can I avail exemption in F7 F8 & F9. If so please award me these before standard exam entry deadline. with bundles of thanks, Dilshad Hussain [registration number redacted]." 8. Attached to that was a letter dated August , which purported to show that it had been issued by The Institute of Chartered Accountants of Pakistan and that Mr Hussain had passed The Institute of Chartered Accountants of Pakistan's modules A, B, C, D, E and F. 9. On 9 November 2015, ACCA's New Accreditations Officer forwarded a copy of the letter to a representative of ACCA Pakistan, requesting assistance in confirming the authenticity of the verification letter. 10. On 17 November 2015 the Examinations Director of The Institute of Chartered Accountants sent a letter to ACCA in which he confirmed that the letter Mr Hussain had submitted to ACCA had not been issued by The Institute of Chartered Accountants of Pakistan. 11. On 7 December 2015, ACCA Investigations department wrote to Mr Hussain's registered address, together with his previous registered address, to ascertain if he was willing to receive correspondence from ACCA at those addresses or another address. Mr Hussain did not reply to those s. On the same date, ACCA Investigations department tried, unsuccessfully, to contact Mr Hussain by telephone on the numbers he had provided to ACCA previously. 12. On 10 December 2015, ACCA Investigations department wrote to Mr Hussain at his registered address, enclosing copies of the letter and s received by ACCA from him requesting that he provide a response by 31 December ACCA Investigations department received an from Mr Hussain's address at 2 stating that s could be sent to him. ACCA Investigations department then ed Mr Hussain a copy of its letter, dated 10 December 2015, to 2. In response Mr Hussain ed stating that s should be sent to 3.

5 13. On 11 December 2015, ACCA Investigations department ed Mr Hussain a copy of its letter dated 10 December 2015 and enclosures to On 6 January 2016, ACCA Investigations department once again ed Mr Hussain at 3, stating that if a satisfactory response was not received from him by 27 January 2016, an allegation under Complaints and Disciplinary Regulation 3(1) would be raised against him. 15. On 16 January 2016, ACCA Investigations department received an from 3 to the effect that he was going to provide a response after getting some evidence and that he did not know what happened. 16. On 23 August 2017 Mr Hussain sent an to ACCA's Hearings Officer in which he stated: "Sir, last week I have received mail from ACCA in which I was accused to use illegal way about exemption. For that I want to clarify u that I have not used any illegal way regarding exemption. Neither I have submitted any fake document nor have I knowledge about it. I have taken regular attempts. U can check mine record of previous attempt of ACCA."[Sic] MR HUSSAIN'S CASE 17. Mr Hussain told the Committee that he did not send the verification letter to ACCA and that he had never applied for exemption from ACCA Professional Examinations. He denied that 2 was an account that he had ever used. He could not say whether the document was false. Mr Hussain said he did not know why someone else would apply for exemption from ACCA professional examinations for him, or create a forged document to do so, and he said that he was confused by this. 18. Mr Hussain was taken through the history of the s registered to his ACCA student account. He was reminded of the evidence of ACCA's Connect team Manager, who described the process for changing personal details such as a student's registered account. Mr Hussain accepted the only two options involved logging in to the account, or responding to a direct ACCA request (which has not been suggested). He told the Committee that he had no idea who could

6 have logged in to his account to enable the change of his registered address, or indeed why anyone would have wanted to do so. 19. In relation to Allegation 2, Mr Hussain denied receiving any of the correspondence from the ACCA Investigating Officer, and therefore implicitly denied any failure to cooperate with the investigation. THE COMMITTEE'S DECISON ON THE ALLEGATIONS 20. The Committee bore in mind that ACCA had brought these allegations and the burden remained upon ACCA to prove its case. Mr Hussain did not have to prove anything. The standard of proof was the balance of probabilities but the Committee was mindful that it had to look for cogent evidence when considering an allegation of dishonesty. 21. The Committee found as facts that the verification letter that purported to be from the Institute of Chartered Accountants of Pakistan was not a genuine document, and that Mr Hussain had not passed the examinations set out therein. Whilst Mr Hussain did not unequivocally admit this to be the case, he did not seek to argue against this, nor did he adduce any evidence that was capable of undermining the clear evidence that the ICAP document was a fake. 22. The Committee considered that the key question to be determined was whether Mr Hussain had caused or permitted the verification letter to be sent to ACCA by on or around 9 October 2015 in support of his application for exemptions. 23. The Committee was satisfied that the dated 9 October 2015, seeking exemption from ACCA examinations F7, F8 and F9 and containing the verification letter, had been sent from Mr Hussain's registered address at the time and that Mr Hussain had sent that . It found the evidence relied upon by ACCA presented a clear and compelling case that supported the factual basis of the allegation. 24. The Committee considered it significant that Mr Hussain had failed ACCA examinations F7, F8 and F9 in the June 2015 examination session. That represented the fifth time that he had failed the F7 paper, the third time that he

7 had failed the F8 paper, and the third time that he had failed the F9 paper. The false verification letter that purported to confirm that Mr Hussain had passed the ICAP equivalent of those examinations was dated 19 August 2015, a short time after Mr Hussain had been unsuccessful in passing the ACCA examinations in June The Committee found that the fraudulent letter was intended to deceive ACCA and was a deliberate attempt to remedy Mr Hussain's repeated inability to pass the F7, F8 and F9 examinations. No-one other than Mr Hussain stood to benefit from the deception, and the Committee found it inconceivable than someone other than Mr Hussain would have submitted the false document using Mr Hussain's account and without his knowledge. 25. The Committee also considered it significant that in the years preceding the December 2015 examination session, Mr Hussain had sat the relevant examinations on each available opportunity, but that he did not do so in December 2015, which was shortly after the submission to ACCA of the exemption application. The Committee drew the inference that this was because Mr Hussain knew that that application had been made, and he was hoping for exemptions to be granted. It rejected his contention that financial reasons had prevented him from sitting the examinations. 26. In relation to Allegation 2, The Committee also found that Mr Hussain had failed to respond to ACCA's Investigating Officer's correspondence (both and letters) of 10 December 2015 and 6 January The Committee rejected his account that he did not receive the correspondence sent by the Investigating Officer to his registered and postal addresses. Furthermore, the Committee bore in mind that in December 2015 and then in January 2016, Mr Hussain had sent s to ACCA in connection with the investigation. Moreover, the Committee had no reason to doubt that the letter sent on 10 December 2015 to Mr Hussain's registered postal address did not reach him, and Mr Hussain had not contended that any other ACCA correspondence had failed to do so. 27. The Committee was satisfied that such response as was eventually made on 23 August 2017, after the Notice of Hearing had been sent to Mr Hussain, was far too late to satisfy the requirement in Complaints and Disciplinary Regulation 3(1) to fully co-operate with ACCA's Investigating Officer during the course of the investigation. By the time Mr Hussain's provided that brief response, the

8 investigation had been completed and the matter had been listed for hearing before the Disciplinary Committee. 28. In making its findings of fact, the Committee carefully considered all of the evidence in the hearing bundles and Mr Hussain's oral evidence before it, weighing all of the evidence dispassionately and determining, using its experience, expertise and common sense, which evidence it accepted and which evidence that it rejected. It preferred the evidence adduced by the ACCA to the account given by Mr Hussain, finding it to be inherently implausible and unreliable. 29. Having found the facts giving rise to Allegation 1 proved, the Committee was satisfied that Mr Hussain had been acting dishonestly. It was in no doubt that reasonable and honest people would consider that to submit a false verification letter in order to be granted exemptions from ACCA examinations was thoroughly dishonest. The Committee also concluded that Mr Hussain would have known that reasonable and honest people would think that. Furthermore, the Committee was in no doubt that he had acted in clear breach of ACCA's Fundamental Principle of Integrity, in that he was being neither straightforward nor honest. 30. The Committee was satisfied that both Mr Hussain's dishonest behaviour and his subsequent failure to cooperate with the ACCA investigation into a very serious allegation was morally culpable, and discreditable to Mr Hussain, ACCA and the Accountancy Profession. The Committee considered the overall conduct to be a significant departure from the high standards expected of an ACCA student and conduct that brought ACCA and the profession into disrepute. 31. Accordingly, the Committee was in no doubt that the behaviour found proved amounted to misconduct. To characterise it as anything other than misconduct would fail to uphold proper professional standards and would undermine public confidence in the profession and in the regulatory function of ACCA. 32. Accordingly, the Committee found Allegations 1(a), 1(b)(i), 1(b)(ii) and 2(a) proved. Allegation 2(b) had been pleaded as an alternative and so the Committee did not need to consider it.

9 SANCTION AND REASONS 33. The Committee had regard to ACCA's Guidance for Disciplinary Sanctions. It had at the forefront of its consideration the public interest, which included not only the protection of members of the public, but also the maintenance of public confidence in the profession and in ACCA, and the declaring and upholding of proper standards of conduct and behaviour. The Committee recognised that the purpose of sanctions was not to be punitive, although a sanction may have a punitive effect. 34. Mr Hussain had not provided any references or testimonials. However, the Committee considered that the absence of any previous disciplinary findings amounted to some mitigation. Mr Hussain told the Committee that he was working as a tutor to student accountants, and that he was still sitting his ACCA professional examinations. 35. The Committee considered that there were no aggravating features other than the very serious misconduct itself. 36. The Committee first considered taking no further action in this case. It was in no doubt that to do so would fail properly to mark the misconduct of Mr Hussain and would undermine confidence in ACCA as a Regulator. 37. Having decided that it was necessary to impose a sanction in this case, it considered the question of sanction in ascending order, starting with the least restrictive. 38. The Committee first considered whether the appropriate sanction would be the Admonishment of Mr Hussain. The misconduct arose from a deliberate attempt to deceive ACCA with the aim of personal advancement and thereafter a refusal by Mr Hussain to engage with his Regulator in the investigation of his wrongdoing. The Committee determined that an Admonishment would not adequately reflect the nature of the misconduct in this case and would undermine public confidence in the regulatory process.

10 39. For the same reason, the Committee determined that neither a Reprimand nor a Severe Reprimand was appropriate by way of sanction and that to impose either of these sanctions would not publicly mark the nature and seriousness of the misconduct in this case, nor would it suitably declare and uphold proper standards of conduct. 40. The Committee considered that Mr Hussain's misconduct, in particular his dishonesty, represented fundamental departures from the standards expected of a student member of ACCA. The Committee was satisfied that such dishonesty was fundamentally incompatible with being a student member of ACCA, and that no sanction short of removal from the student register was appropriate in his case. The Committee considered that a failure to remove a dishonest student from the register would fail properly to uphold proper standards of professional behaviour and would seriously undermine public confidence in the profession and in ACCA as its regulator. Accordingly the Committee ordered that Mr Hussain be removed from the student register. COSTS 41. ACCA claimed costs in the sum of Mr Hussain said that he had "financial issues" because of flooding where he lived. He told the Committee that he had incurred debts because of the flooding, but he had limited income from his tuition work. He said that he otherwise relied upon his family, who were farmers, for financial support. The Committee decided that it was appropriate to award costs and that the sum claimed was fair and reasonable. However, in light of Mr Hussain's limited means, the Committee ordered Mr Hussain to pay one half of the sum claimed by way of costs, namely EFFECTIVE DATE OF ORDER 42. This order shall take effect from the date of the expiry of the appeal period unless Mr Hussain gives notice of appeal prior to the expiry of that period, in which case it shall become effective (if at all) as described in the Appeal Regulations.i

11 Dr Jonathan Page Chairman 19 September 2017