Two equal shareholders of a company (A and B) were involved in a marital dispute with each other. Without the knowledge of Shareholder A, the Member accepted a new engagement from Shareholder B to prepare the annual financial statements and tax returns for the company. The Member sent a takeover letter to the former accountant for the company but did not wait sufficient time for a reply, and did not follow-up with the former accountant before performing the work. The Member also disregarded a request from Shareholder A to not proceed with the work. The Member then filed the corporate tax returns without the knowledge and consent of Shareholder A. By excluding Shareholder A from the company’s affairs, the Member did not display objectivity.
The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,
201. – Maintenance of the good reputation of the profession
202.1 – Integrity and due care
202.2 – Objectivity
302.1 – Communication with predecessor
The Committee recommended the Member:
- Accept a reprimand;
- Pay a fine of $1000; and
- Pay expenses of $2218 plus GST.