The Member was engaged as the accountant for Company A, including preparing its annual Notice to Reader financial statements and tax returns. Company B loaned money to the individual who was an owner of Company A. The Member controlled Company B. When the individual was unable to repay the loan from Company B, the Member instructed a bailiff to seize the shares of Company A from the individual and sold them to a third party whose companies were also clients of the Member.
The Member was not independent of Company A and failed to disclose their financial interest in Company B in the financial statements of Company A. They had a conflict of interest when they acted to seize the shares of Company A from the individual, and inappropriately discussed the financial affairs of the individual with the third party to whom they sold the shares of Company A.
The Investigation Committee determined the Member contravened the following:
Rules of the CPABC Code of Professional Conduct
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
202.2 - Objectivity
204.10 - Disclosure of impaired independence
207 - Unauthorized benefits
208 - Confidentiality of information
210.1,210.2(a), 210.3, 210.4 - Conflicts of Interest
CGA-BC Code of Ethical Principles and Rules of Conduct
Rule R101 - Discredit
Rule R107.2 - Constraints on a Professional Practice other than Public Accounting
Rule R202 - Compilation Engagements
Rule R204 - Resolution of Other Conflicts of Interest
The Investigation Committee recommended the Member:
- accept a reprimand;
- pay investigation expenses of $12,973; and
- attend and successfully complete a professional development course in ethics and conflicts of interest which is satisfactory to the Director, Professional Conduct.