Tribunal considers admission of guilt in disciplinary proceedings
An accountant who reported himself for improper conduct has been removed from the country's professional Register of Members.
The disciplinary tribunal of the New Zealand Institute of Chartered Accountants (NZICA) removed accountant Yau Min Chan after he was found guilty of the following:
- Misconduct in a professional capacity
- Breaching the Rules and Code of Ethics of NZICA
- Making false and misleading statements to the Institute
"There is no less restrictive penalty that would be appropriate in the circumstances, and removal from the Register is reasonable and proportionate," the tribunal said in its ruling.
Self-reporting improper conduct
Chan self-reported through a lawyer in July 2022 that he put clients' monies into a bank account not validly constituted as a trust account and misappropriating client moneys.
The Professional Conduct Committee (PCC) carried out an investigation after Chan's disclosure and referred the matter to the tribunal, where the accountant plead guilty to the charges raised against him.
Chan admitted that he "misappropriated client monies of at least $417,685," and that he retained thousands of monies from various clients in bank accounts he operates "for longer than is reasonably admitted necessary to discharge the purpose for which the client monies were received."
He also admitted to providing false and misleading information NZICA in 2021, where he claimed that he does not have a trust account and he did not have any client monies deposited into any bank account belonging to his practice, among others.
The tribunal ruled that the monies of Chan's clients "intermingled" with his personal and practice monies.
"From time to time, the member misappropriated client funds in that account to his own use or for the benefit of other clients," the tribunal said.
By the time of the hearing, however, Chan had either repaid or accounted to the affected clients most of the funds that he held of misappropriated, except for two amounts that he was "unsure" how they should be dealt with.
"That most of the misappropriated funds have subsequently been repaid or accounted for, and the Member's voluntary disclosure and cooperation with the PCC's investigation and prosecution do not diminish the seriousness of the Member's misconduct but could in appropriate circumstances go to mitigation of penalty," the tribunal said.
Should his self-reporting matter?
The disciplinary tribunal acknowledged that Chan's disclosure should be a mitigating factor in the disciplinary proceedings. It pointed out, however, that the issues he admitted to would have likely been uncovered in the next scheduled Practice Review.
"More significantly, however, the seriousness of the member's conduct and of the charges mean that there is no real scope for a penalty less than removal from membership," the tribunal said in its decision.
It also ordered Chan to pay $29,000 in costs and hearing expenses.
In an interview with the New Zealand Herald, Chan denied misappropriating the money he received, adding that the funds mixing with his personal money were because "sometimes he got confused."
His lawyer, Steve Keall, added that two cases that Chan wasn't sure how to address have also been resolved.
Chan, who is 69 years old, said he would not be appealing the tribunal's decision.
"I've accepted the decision - that's it. I'm getting old now; I just want to sell my business, retire, and disappear," he told the Herald.
