Accountancy & Actuarial Discipline Board: Efficient and effective changes to Disciplinary arrangements
The Accountancy & Actuarial Discipline Board ("AADB") is the independent, investigative and disciplinary body for accountants and actuaries in the UK. The AADB forms a part of the Financial Reporting Council (FRC), a body with broader regulatory and supervisory interests across the accounting and corporate sector, including issues of corporate governance and exercising its functions through a range of operating bodies.
The focus of the AADB is on cases of public interest, often cases involving significant and complex issues. The usual referral of cases to the AADB for 'public interest' cases is via the accountancy or actuarial body primarily concerned. However, the AADB also has the power to call in cases whether or not they have been referred to it by an accountancy or actuarial body. .
Disciplinary Complaints filed following an AIDB investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a Complaint, there is a wide range of sanctions which it can impose including an unlimited fine, exclusion from membership of a professional body and withdrawal of practising certificates or licenses. .
In January 2008 the AADB published an important consultation document on proposed revisions to its Accountancy Scheme with rules due in force mid 2008. .
The proposed changes are intended to uphold the principles of fairness, transparency and proportionality, which the AADB consider to be the hallmarks of effective, independent regulation and to ensure the continued provision of a “demonstrably fair, independent and expert system for investigating and, where appropriate, hearing significant public interest disciplinary cases” (AADB Aims and Objectives). These proposed arrangements also provide additional tools for the conduct and scope of investigations before determination. .
Key changes proposed by the Board include: .
• A change to the definition of conduct subject to disciplinary action and the replacement of “misconduct” with the term “Relevant Conduct”; • a new power to conduct preliminary enquiries before making a decision to investigate; • changes to the procedures relating to the decision to lay complaints, including the formation of a Disciplinary Decisions Committee (DDC); • a two-tier test to be applied by the DDC before a matter proceeds to a disciplinary tribunal – an evidential test and a desirability test; • new procedures to appoint tribunal and appeal tribunal members by an independent Convener; and • restriction of the tribunal’s discretion to award costs against the Board to circumstances where there has been “misfeasance” on the part of Executive Counsel, the DDC or any person engaged to assist with the investigation or tribunal. .
The AADB’s current investigations (eg MG Rover, iSoft and Farepack) are almost invariably substantial and complex. They may often involve issues that impact on other regulators or prosecution authorities (FSA and SFO). The powers of investigation, sanction and the evolving structure of their regulatory and supervisory arrangements provides and elegant example of how regulators can harmonise their standards and rules in order not to perform its stated objectives.