The Accountancy & Actuarial Discipline Board ("AADB") is the independent, investigative and disciplinary body for accountants and actuaries in the UK. It has up to eleven members. The AADB is responsible for operating and administering an independent disciplinary scheme (the Accountancy Scheme) covering members of the following accountants' professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy and the Institute of Chartered Accountants in England and Wales; The Institute of Chartered Accountants of Ireland and the Institute of Chartered Accountants of Scotland.
The AADB operates a separate disciplinary scheme covering members of the Faculty of Actuaries in Scotland and the Institute of Actuaries.
The AADB will deal with cases which raise or appear to raise important issues affecting the public interest in the UK and which need to be investigated to determine whether or not there has been any misconduct by an accountant or accountancy firm, or by an actuary.
The general running expenses of the AADB will be funded by the CCAB bodies as part of their overall financing of the new system and from the FRC actuarial levy. The cost of the AADB's enquiry into individual cases will be borne by the relevant accountancy bodies for accountancy cases and paid for from a case costs fund for actuarial cases.
How cases are dealt with
The Scheme and Regulations contain the detailed rules setting out how cases are dealt with by the AADB.
In the first instance complaints about accountants or accountancy firms should be made to the accountancy body of which the accountant or the firm is a member. Complaints about actuaries should be made to the actuarial body of which the actuary is a member. Matters which raise serious issues affecting the public interest will be referred to the AADB by the accountants' and actuaries' professional bodies. The AADB will then decide whether to investigate the matter. If it decides that a matter should be investigated, it will be referred to the Executive Counsel.
The AADB may also decide of its own accord to investigate a matter without it having been referred to it by one of the accountants' or actuaries' professional bodies.
The Executive Counsel will conduct the investigation and decide whether or not any accountant or accountancy firm or actuary should be subject to disciplinary proceedings. In making this decision, the Executive Counsel acts independently.
If disciplinary proceedings are to be commenced, the Executive Counsel will file a complaint with the AADB and the AADB will appoint a Disciplinary Tribunal to hear the case.
The AADB's powers
The Executive Counsel has the power to require the participating accountants' professional bodies to provide him with documents relevant to any particular matter. He may also seek information and documents from accountants and accountancy firms and require them to give evidence to a tribunal. If any accountant or accountancy firm fails to comply with any such request, this would be grounds for disciplinary proceedings. The Executive Counsel will have similar powers under the Actuarial Scheme once it becomes effective.
Who will judge complaints?
Complaints will be decided by Disciplinary Tribunals which will be composed of either three or five suitably qualified people drawn from a Panel of Tribunal members maintained by the AADB. The Chairman of the Tribunal will always be a lawyer. In a three-person Tribunal there will also be one lay person and one accountant or actuary (or two lay persons and two accountants or actuaries in a five person Tribunal). A majority of the Tribunal will always be non-accountants or non-actuaries. To ensure their independence, no member of a Tribunal should be an officer or employee of any of the accountants' or actuaries' professional bodies or of the FRC or any of its operating bodies including the AADB.
Tribunal hearings will normally be open to the public except in exceptional circumstances where the Tribunal decides that this would not be in the interests of justice. The Tribunal will sit and be presented with the evidence in the case. Witnesses may be called. Although the Tribunal hearing will be similar to a hearing in court it will be less formal and the Tribunal will not be subject to the same restrictions as a court might be in accepting evidence. The accountant, accountancy firm or actuary which is subject of the complaint will be entitled to attend and be legally represented at the hearings and will have a full opportunity to defend any complaints, present evidence and challenge any evidence against them.
If the Tribunal upholds a complaint, there is a wide range of sanctions which it can impose. It can also order the accountant, accountancy firm or actuary to pay all or part of the costs of the investigation and the hearing. If the Tribunal dismisses a complaint, it has power to order the AADB to pay legal costs. The Tribunal does not have the power to order compensation to be paid.
Appeals
An accountant, accountancy firm or actuary can appeal any finding against it to an Appeal Tribunal. A retired judge or a senior barrister will first consider any appeal. If he or she gives leave to appeal, the appeal will be heard by an Appeal Tribunal which will be set up by the AADB in the same way and subject to the same criteria as the Disciplinary Tribunal which heard the original complaint.
Transparency
The new investigation and discipline scheme will be transparent. All decisions made by the AADB, the Executive Counsel, Disciplinary Tribunals and Appeal Tribunals will be published unless it would not be in the public interest to do so and subject to any legal constraints. The hearings of the Disciplinary Tribunals and Appeal Tribunals will normally be open to the public.
Independence
The Scheme will operate independently. A majority of the AADB's members and its chairman are non-accountants or non-actuaries. The tribunals and appeal tribunals will be composed of a majority of non-accountants or non-actuaries. No officers or employees of any of the accountancy or actuarial bodies, the FRC or any of its subsidiary bodies may be appointed to a tribunal.
Fairness
The Scheme will be demonstrably fair. Any accountant, accountancy firm or actuary under investigation or subject to disciplinary proceedings will be able to be legally represented at all times during the investigation and at any hearings. They will be told what complaints they face and will given access to all documentary evidence obtained by the Executive Counsel in the course of the investigation. They will also have the opportunity to comment on any preliminary views formed by the Executive Counsel before a decision to present a formal complaint is made. They will be entitled to attend hearings, present evidence on their behalf and challenge any evidence against them, including cross-examining witnesses.
