Unskilled, conflicted accountant rebuked

Numerous blunders by an accountant have earned him a rebuke from the NZ Institute of Chartered Accountants. Photo / Thinkstock

An accountant has been rebuked for becoming liquidator of a company when he was not independent, for taking up insolvency work when he was not skilled enough, and for failing to act with the "due care and diligence".

The New Zealand Institute of Chartered Accountants conduct committee has detailed numerous blunders by one of its members in a decision "severely" reprimanding him and ordering him to pay $1600 of the costs of the inquiry into his behaviour.

The committee met about the man last month, who it did not name, and said his conduct would have warranted referral to the accountant's disciplinary tribunal.

However, they dealt with his case in "consent orders", which the man agreed to.

In its public decision on his behaviour, released last week, the committee said the man had accepted appointment as liquidator of a company "when he was disqualified from doing so because he was not independent".

"The Member was a creditor of the company and/or had provided professional services to the company within two years immediately before the commencement of the liquidation," chairman of the committee David Barker said.

During this liquidation, the accountant incorrectly stated in this first report that the directors of the company said it could pay its debts when the company was, in fact, insolvent.

He also failed to record that unauthorised drawings of a director, worth $23,000, may be recoverable.

When acting as the liquidator of another company, the man made similar errors.

The committee acknowledged in one of these liquidators that the man was trying to help a client who was in a "difficult situation" and that he had now stopped doing insolvency work.

"Notwithstanding this, the Committee was troubled by the shortcomings identified in the complaint. It was concerned that the Member had taken on work which he clearly did not have the knowledge or experience to perform, and had failed to seek appropriate

advice or undertake training to ensure he was sufficiently informed of applicable standards and legislative requirements to perform the engagements," Barker said.