The former accountant of failed finance firm National Finance has won an appeal against his 18 month jail term.

John Gray 41, plead guilty to theft and false accounting charges in the Auckland District Court last year and was remanded on bail pending an appeal of a decision not to grant him home detention.

National Finance was placed in receivership in 2006, with the total loss to investors about $8.25 million. About $1.5 million in direct losses was said to be attributable to Gray's offending.

The court heard Gray helped conceal related party loans meaning the realities of the company's financial position were not known for a "significant, and loss causing, period of time".

Justice Rebecca Ellis said Judge Roderick Joyce, in sentencing Gray, was of the view that "the purposes of denunciation and deterrence could not be achieved by a sentence other than imprisonment".

"While wholeheartedly sharing the learned District Court Judge's concerns about appropriate messages being sent to the finance industry ...there is a real public interest in sentences of home detention being imposed in appropriate cases," Justice Ellis said in her decision.

She has recommended a substituted sentence of nine months' home detention.

Gray's lawyer Sanjay Patel said he was pleased the sentence had been "commuted" to home detention given his client received no financial gain from the offending.

Patel said he felt there was a general perception that anyone involved in the finance industry, especially in case related to failed finance companies and fraud, should be jailed.

"Essentially I think he was pressured or bullied or a combination of both into doing something really stupid which he admitted."

"His motivation was not greed. He had nothing to gain from this. He lost a considerable amount of money that he had invested in the scheme."

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