DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION

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1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mr David Alan Budd Heard on: Thursday, 15 February 2018 Location: The Adelphi, 1-11 John Adam Street, London, WC2N 6AU Committee: Mrs Judith Way (Chairman), Ms Wanda Rossiter (Lay) and Mr Barry Picken (Accountant) Legal Adviser: Mr Sanjay Lal Persons present and capacity: Mrs Emily Healy-Howell (ACCA Case Presenter) and Miss Rachael Davies (Hearings Officer) Observers: None SUMMARY OF OUTCOME: Severe Reprimand and costs payable to ACCA in the sum of 6,300. SERVICE OF PAPERS 1. The Committee had the following papers before it; a Bundle numbered pages A-V and 1-111, a Service Bundle numbered pages 1-23 and a Tabled Service

2 Bundle numbered pages The Case Presenter drew the Committee s attention to the Notice of Hearing and the Royal Mail Track and Trace documentation, which showed that Notice had been sent in good time to the Member in respect of this hearing. 2. The Committee heard and accepted the advice of the Legal Adviser. 3. The Committee was satisfied that proper Notice had been given in accordance with Regulation 22 of the Complaints and Disciplinary Regulations 2017 (as amended) (the Regulations ). PROCEEDING IN ABSENCE 4. Mrs Healy-Howell submitted that it was in the interests of justice to proceed in the absence of the Member. She highlighted the additional efforts to contact Mr Budd via s and address contact details provided to ACCA by him. She highlighted the fact that ACCA had received no response to any of these requests. She suggested that Mr Budd was aware of matters, as he had signed for some letters in the past at the same registered postal address. 5. The Committee heard and accepted the advice of the Legal Adviser as to the factors it must consider in the exercise of its discretion to proceed in the absence of the Member. 6. The Committee was satisfied that it was in the interests of justice to proceed in the absence of Mr Budd. It was satisfied he had not applied for an adjournment to either attend on a future occasion or to instruct representatives. There was no evidence to suggest a medical reason for nonattendance. Further, the Committee was satisfied that were it to adjourn the case there was no evidence to suggest he would attend on a future occasion. 7. Furthermore, it was in the public interest and indeed in the interest of Mr Budd for the matter to be heard in an expeditious and timely manner.

3 8. Balancing Mr Budd s interest with the public interest the Committee decided to proceed in the absence of Mr Budd. ALLEGATION 9. The Committee convened to consider the following allegation: Allegation 1 (a) Contrary to Regulation 3(1) of the Complaints and Disciplinary Regulations 2014, Mr Budd has failed to co-operate fully with the investigation of a complaint in that he failed to respond, fully or at all, to any or all of ACCA s correspondence as set out in Schedule A. (b) In light of the facts set out at 1(a) above Mr Budd is: i. Guilty of misconduct pursuant to bye-law 8(a)(i), or ii. Liable to disciplinary action pursuant to bye-law 8(a)(iii). Schedule A Letter dated 25 July 2017 Letter dated 11 August 2017 Letter dated 7 September 2017 BRIEF BACKGROUND 10. The evidence before the Committee was contained in the Bundles. 11. The evidence relied on by ACCA was as follows; in a letter dated 26 April 2017, Mr Budd was advised by an Investigating Officer within ACCA s Investigations Department of the complaint against him raised by a client, Mr

4 A made on 17 January Enclosed with the letter was a copy of Mr A s complaint form and subsequent documents received from Mr A. 12. In a letter from the Investigating Officer dated 25 July 2017, Mr Budd was again provided with a copy of the complaint form and documents. The letter went on to request that he respond to a number of enquiries by 8 August 2017 regarding a request for documentation. The letter also cited the relevant parts of Complaints and Disciplinary Regulation 3(1) relating to his obligation to cooperate, including 3(1)(b) which states The duty to co- operate includes providing promptly such information, books, papers or records as the investigating officer... may from time to time require 13. It was alleged that Mr Budd failed to respond to those enquiries and therefore further letters were sent to him on 11 August and 7 September 2017, enclosing a copy of the letter of 25 July 2017, and asking him to respond to the enquiries raised in that letter. He was advised that an allegation of failure to cooperate would be raised if no response was received by the deadlines specified - the deadlines being 25 August for the letter of 11 August, and 22 September for the letter of 7 September. Both deadlines passed and no response had been received from Mr Budd. 14. Mrs Healy-Howell submitted prior to this matter being referred to ACCA s Investigations Department, there is evidence Mr Budd, or at least someone with the name Budd, signed for the letters sent by ACCA by Special Delivery, which notified him that a complaint had been received from Mr A regarding his conduct. Attempts have also been made to contact Mr Budd by on addresses provided by him and Mr A. Attempts were also made to contact him by telephone on numbers provided by Mr A. He did not respond to any of the attempts to contact him. She highlighted the telephone attempts set out in the various file notes to try and contact Mr Budd and his nonresponse to messages left on his voic Mrs Healy-Howell submitted that ACCA acts in the public interest by ensuring its members uphold proper standards of conduct, thereby maintaining public confidence in the accountancy profession. She submitted that the failure by Mr Budd to cooperate with the investigation had undermined ACCA s ability to

5 act in the public interest in that it has prevented ACCA from investigating the complaint raised by Mr A. 16. She submitted that serious issues were raised by Mr A and relevant to ACCA s Code of Ethics and Conduct, which required Mr Budd s cooperation by his responding to those enquiries raised in the letters referred to in Schedule A. She submitted that his failure to cooperate has not allowed ACCA a full understanding of the concerns that had been raised. 17. The Committee heard and accepted the advice of the Legal Adviser Allegation 1 - Found Proved 18. The Committee had regard to the provisions of Relevant Bye-laws and Regulations [as applicable in 2017]. Bye- law 8 Liability to disciplinary action 8. (a) A member, relevant firm or registered student shall, subject to bye-law 11, be liable to disciplinary action if:- (i) he or it, whether in the course of carrying out his or its professional duties or otherwise, has been guilty of misconduct;... (iii) he or it has committed any breach of these bye-laws or of any regulations made under them in respect of which he or it is bound; (c) For the purposes of bye-law 8(a), misconduct includes (but is not confined to) any act or omission which brings or is likely to bring discredit to the individual or relevant firm or to the Association or to the accountancy profession. Regulation 3 of ACCA s Complaints and Disciplinary Regulations 2014 [as applicable in 2017].

6 (1) Duty to co-operate (a) Every relevant person is under a duty to co-operate with any investigating officer and any assessor in relation to the consideration and investigation of any complaint. (b) The duty to co-operate includes providing promptly such information, books, papers or records as the investigating officer or assessor may from time to time require. (c) A failure or partial failure to co-operate fully with the consideration or investigation of a complaint shall constitute a breach of these regulations and may render the relevant person liable to disciplinary action. (d) A relevant person is not permitted to make a charge to the complainant for the cost of co-operating with the consideration or investigation of the complaint. 19. The Committee had regard to the letters in Schedule A which were referred to in the Allegation and which are contained in the Bundle. The Committee noted that no correspondence or response of any sort had been received from Mr Budd in response to any of these letters. Furthermore, the Committee noted that earlier letters dated 16 February 2017 and 8 March 2017 which were sent to Mr Budd s registered address had been signed for and received. The Committee was satisfied that a reasonable inference could therefore be made that the letters set out in Schedule A were received by Mr Budd as they were sent to his registered address. The Committee noted that Mr Budd was able to communicate with ACCA in paying his membership fee on 31 December The Committee was satisfied that Mr Budd had chosen to ignore the letters set out in Schedule A, and therefore the Committee finds Allegation 1(a) proved. 20. The Committee was satisfied that the failure to co-operate with one's professional body is a serious matter, demonstrating a lack of professional responsibility and a disregard for ACCA's regulatory process. The failure to cooperate undermines the regulatory function. The Committee was satisfied

7 that the failure to cooperate constitutes misconduct under bye-law 8(a)(i). The bye-law contained within it a requirement to provide information promptly. Mr Budd s behaviour brought discredit to himself, the Association and the accountancy profession and would properly be regarded as misconduct by fellow members of the profession. The Committee found Allegation 1(b)(i) proved. Having found Allegation 1(b)(i) proved, the Committee did not consider Allegation 1(b)(ii), as this was in the alternative. SANCTION 21. The Committee had regard to the Guidance for Disciplinary Sanctions. The Committee accepted the advice of the Legal Adviser. The Committee accepted his advice that any sanction must be proportionate and it should consider the least restrictive sanction first and move upwards only if it would be proportionate to do so. The Committee has balanced Mr Budd s interests with that of the public interest, which includes the protection of members of the public, the maintenance of public confidence in the profession, and the declaring and upholding of proper standards of conduct and performance. The issue of sanction is for the Committee, exercising its own professional judgement. 22. Mrs Healy-Howell informed the Committee of no previous matters known to ACCA. She highlighted the previous history of the matter, and she submitted that the costs as set out in the Costs Schedule were reasonable. 23. The Committee carefully considered the aggravating and mitigating factors in this case. The Committee considered the following to be aggravating features: Non cooperation with the Regulator over a period of time No evidence of insight Cooperation with the Regulator is at the heart of the regulatory system

8 24. In terms of mitigating factors the Committee took into account the following factor: No previous disciplinary matter 25. The Committee first considered taking no action in this case. It was in no doubt that to do so would fail to mark the gravity of Mr Budd s misconduct and would undermine confidence in the profession and in ACCA as regulator. 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. 26. The Committee considered whether the appropriate and proportionate sanction would be an Admonishment or Reprimand. The Committee decided that the misconduct found was too serious, and that public confidence in the profession and in the regulator would be undermined if any such orders were made. 27. The Committee then went on to consider the question of whether a Severe Reprimand would be appropriate and proportionate in the circumstances of this case. The Committee determined that the imposition of a Severe Reprimand would be the proportionate sanction because, although it was misconduct of a serious nature with no evidence of insight up to the present time, it was not, in the particular circumstances of the case, behaviour meriting exclusion from membership. There was no evidence to suggest an on-going or current risk to members of the public. The Committee was satisfied that the imposition of a Severe Reprimand would uphold public confidence in the profession and in ACCA as its regulator. COSTS AND REASONS 28. ACCA claimed costs of , which comprised the costs of the complaint and the matters as highlighted by Mrs Healy-Howell in respect of the history of the matter. These cover the costs of investigation, the presentation of the case as well as the costs of the Hearings Officer. Mrs Healy-Howell relied

9 upon the detailed Schedule of Costs set out in the Tabled Additional Bundle pages and the Committee had regard to the detailed breakdown set out therein. 29. The Committee noted Mr Budd had submitted no Statement of Financial Position. The Committee decided that it was appropriate to award reduced costs in the sum of This reflected a reduction in the claim for the Senior Investigating Officer s time investigating the original complaint, which did not proceed further, as well as a reduction in the Case Presenter and Hearings Officer s costs because of a shorter hearing. EFFECTIVE DATE OF ORDER 30. The Committee decided that the order would be effective at the end of the expiry of the appeal period referred to in the Regulations. Mrs Judith Way Chairman 15 February 2018