Accountant removed from register over misconduct

The NZICA's disciplinary tribunal has ordered the removal of Colin Brett Whyte as a member of the institute.

A Wellington bookkeeper who failed to pay tax when it was due and operated his practice while it was insolvent has been removed as a member of the New Zealand Institute of Chartered Accountants.

Two other accountants have also been rapped over the knuckles by the institute in recent weeks for conflicts of interest. Although both of these bookkeepers were deemed to have failed to meet ethical standards and were reprimanded, their cases were not taken any further and their names were kept secret.

The situation of Colin Brett Whyte, however, was serious enough to come before the NZICA's disciplinary tribunal, which ordered his removal as a member of the institute.

Although Whyte copped that sanction in August, the accountancy body made the decision public only this month.

Whyte - of the accounting practice The Whyte Group - appeared before the tribunal in July to defend five charges, including that his conduct was unbecoming of an accountant and that he'd breached the NZICA's rules and code of ethics.

He was also charged with failing to reply to correspondence from the NZICA or pay an amount to it that was due.

All of these charges were found to be proven, but one charge, that Whyte provided false information to the NZICA, was not.

Whyte, according to the tribunal's decision, admitted his firm had failed to pay PAYE and GST to Inland Revenue when it was due and there was evidence that he had continued to be in tax arrears for months.

"The tribunal finds that the member's admitted conduct breaches taxation laws and brings the profession into disrepute. Chartered accountants have a higher threshold of tax compliance than other taxpayers, so to be in a position of continued arrears is far from acceptable," tribunal chairman Mike Whale said in the decision.

The tribunal also heard that Whyte admitted he did not make a full payout to a former worker following an order of the Employment Relations Authority. Outstanding payments were not made until the former employee issued a statutory demand.

"The way in which the member dealt with the matter was unprofessional," Whale said.

The tribunal also found that its now former member had operated The Whyte Group while it was insolvent.

Said Whale: "In the tribunal's view, the inability of a chartered accounting practice to pay its debts as they fall due affects the good reputation of the profession -- the public expectation is that chartered accountants, who are advising others on sound business and financial practices, should be able to run their own businesses effectively."

The professional conduct committee that prosecuted Whyte said he was a repeat offender and that the only appropriate penalty was his removal from the NZICA's register.

Whyte, on the other hand, said he would attend an ethics course and that the tribunal should appoint a mentor and put him under supervision for a year.

But the tribunal was not swayed.

Said Whale: "When viewed overall - particularly in light of the member's repeated failure, notwithstanding a past censure, to respond to institute correspondence - the tribunal finds that, while it is important to consider the member's rehabilitation, the seriousness of the member's misconduct, the importance of maintaining professional standards and the protection of the public interest requires that the member's name be removed from the register of members."

The tribunal ordered Whyte to pay $38,000 in costs and declined his bid for name suppression.