AAT’s Professional Standards team are helping uphold standards across the organisation, from providing ethical advice to holding accountants to account through our disciplinary procedures.

Professional Standards is currently an eight-strong department at AAT. Theirs is a supervisory role, ensuring AAT members behave professionally while maintaining the high ethical standards the public expects from AAT.

On a typical day, this “upholding of standards” can see the Professional Standards team follow up alleged complaints that a member has behaved unethically or investigating other professional misconduct, such as members failing to keep up with their anti-money laundering (AML) responsibilities or providing services to clients without a valid practising licence, and, more rarely, fraud and other serious financial crimes.

The Professional Standards team has the power to select members for practice assurance reviews, where a representative may visit your office to see client files, fee notes, indemnity insurance policy, AML procedures and CPD records. If this hasn’t happened to your firm yet, there’s every chance this could happen soon: around 10% of supervised members will get a practice assurance review every year.

AAT’s professional standards manager Helen Barrett says, “it’s in the public interest for AAT to regulate our members. The main benefit is us being able to reassure the public through our promoting and enforcing high standards of professional conduct by our members, particularly those who are providing accountancy services to clients. We also have a duty to monitor and supervise their compliance with money laundering legislation. This is why it’s important for AAT o have some kind of professional standards function to do that effectively.”

How do AAT members use Professional Standards?

Members can contact the team if they need advice on ethics-related topics such as confidentiality or conflict of interest matters. If they have any queries about complying with AML regulations, such as how to report suspected illegal activity, they can get in touch too. They can also lodge complaints against fellow members.

The most popular reason for members to ring Professional Standards? Client troubles. “Oftentimes, it’ll be a difficult client who is moving to another accountant, so they have questions around disengagement and what they can divulge while remaining compliant with the Code of Professional Ethics,” says Adam White, professional standards officer, AAT.

Useful numbers

Ethical helpline: +44 (0)20 7397 3014; email [email protected].

Anti-money laundering helpline: +44 (0)20 7367 1347; email [email protected].

Making a complaint: +44 (0)20 7397 3008 or email [email protected].

How do Professional Standards investigate members?

Broadly speaking, there are three types of investigation.

Fit and Propers

This is where Professional Standards “assesses who can become a member on a case by case basis”, says Barrett. “For example, if somebody wants to be an AAT member and they’re bankrupt or have a criminal conviction, we examine whether they’re fit to join AAT.”

Practice assurance reviews

These monitor members to ensure they’re being compliant with relevant legislation, regulations, policies and the Code of Professional Ethics.

Disciplinary investigations

These usually happen following a complaint from a member of the public or a client, or following a member’s own disclosure to AAT. Actually, a high proportion of Professional Standards’ current caseload is intelligence and findings received from its own practice assurance review activity.

Professional Standards investigates the lack of AML compliance control and procedures in place more than any other case.

“While AML can be time-consuming, it’s in the UK legislation,” says White. “If you’re providing accountancy services, you have to do it. And as a supervisory authority, it’s our responsibility to ensure you’re doing this.” Disciplinary investigations also deal with complaints such as financial/professional misconduct, incompetence and accountants operating without a licence.

However, if somebody contacts Professional Standards accusing an AAT member of serious crimes such as fraud, the authorities take over. “There’s a misconception we’re the police,” says Barrett. “We’re not. We can’t start seizing computers.”

What disciplinary action can Professional Standards take?

If a member is found to have fallen short of standards we reasonably expect of them, which is likely to bring discredit to the member, the accountancy profession or AAT, then Professional Standards are obligated to investigate as misconduct under Disciplinary Regulations. The primary purpose of disciplinary proceedings is not supposed to be punitive, although it may feel like it. The purpose of sanctions is to maintain the public’s confidence in the accountancy profession and to deter future misconduct.

Usually, where misconduct is found, the Disciplinary Regulations allow for cases to be closed on a ‘consent’ basis with the errant member being reprimanded with a £2,000 fine for example. “But consent only works where the member accepts their behaviour and they agree with the investigation findings and sanctions”. The maximum fine AAT can impose is £10,000, while members can also be expelled from the organisation too. All AAT’s sanctions and starting points are set out in its Indicate Sanctions Guidance.

If Professional Standards determines that the case is in the public interest, or where the member does not agree with the investigation outcome, it’ll go to a Disciplinary Tribunal for them to hear the case and determine an appropriate outcome.

Here this may involve costs too. “In one recent tribunal case a member had to pay £10,000 costs to the AAT, in addition to their fine,” says Barrett.

The reputational damage following a tribunal can be particularly tough for members. All disciplinary outcomes (such as termination/suspension of AAT licences) are published on the AAT website, which will appear anytime a prospective client Googles your name.

If AAT members could do one thing…

Most issues investigated by Professional Standards are due to complacency, not criminality.

Says White, “Our misconduct investigations rarely deal with people who are deliberately flouting regulations. Most of the time, it’s down to people becoming complacent because they’re used to doing things in a certain way or had the same clients for a long time. Or they haven’t done their CPD or kept up to date with new legislation. Many people see AML as a time-consuming, box-ticking exercise. It’s a criminal offence not to meet these obligations.

“Make sure you’re reviewing your clients for AML and doing due diligence on a periodic, regular basis,” adds White. “Never just assume everything’s okay. Criminals will deliberately target accountants who have weak AML controls and procedures, if any at all, so we all have a duty to make sure we drive them out, so they don’t succeed.”

Case study

What happened? A member of the public complained to AAT’s professional standards about an AAT accountant who hadn’t filed their self-assessment tax return on time with HMRC. As a result, this person received a financial penalty and was considered ineligible for the self-employment income support scheme grant. This wasn’t the only time AAT had received a complaint about this accountant: HMRC had previously raised concerns about their incompetence when they acted as a witness for a client at a tribunal.

What did AAT do? The member was found to be in breach of AAT’s Code of Professional Ethics. They were reprimanded for 24 months, had their FMAAT designation removed and received a financial fine. Their misdemeanours were also published in AT magazine and on the AAT’s website.

Christian Koch is an award-winning journalist/editor who has written for the Evening Standard, Sunday Times, Guardian, Telegraph, The Independent, Q, The Face and Metro. He's also written about business for Accounting Technician, 20 and Director, where he is contributing editor.