Mr. David S. McDiarmid - February 2, 2011
February 2, 2011
A complaint was filed with the Association against former member Mr. David S. McDiarmid, of Delta, alleging that the former member failed to file corporate income tax returns in a timely manner, failed to inform the client of requirements to make installment tax payments, and that he failed to return personal and business records used to prepare tax returns. Further, the member failed to assist in the investigation by not responding to telephone and written requests for information by the Association.
The Discipline Committee found that Mr. McDiarmid contravened section 14(2) of the Accountants (Certified General) Act as he described himself as a Certified General Accountant and/or CGA after he was no longer registered as a member with CGA-BC.
The Discipline Committee found that Mr. McDiarmid was in breach of CGA-BC’s Codes of Ethical Principles and Rules of Conduct in effect from September 18, 2004 as follows:
- 1st Ethical Principle – Responsibilities to Society, 2nd Ethical Principle - Trust and Duties, 5th Ethical Principle – Professional Practice, and Rule R521 – Right to Take Cognizance as he failed to: maintain his public practice registration in accordance with the requirements of CGA-BC; have appropriate professional liability insurance; participate in the mandatory practice review process; and respond to any requests from CGA-BC, thereby hindering CGA-BC's ability to safeguard the public. Mr. McDiarmid continued to perform public accounting services when he was no longer permitted to do so. He did not act openly or fairly with his clients by not informing them of the changes to his status with CGA-BC and by failing to return client’s records as required. Further, he failed to file T2s and forward tax payments on or before the CRA filing deadlines;
- Rule R101 - Discredit and Rule R606(a) - Detrimental Actions as he was engaged in the practice of public accounting and failed to abide by the registration and membership requirements set out by CGA-BC. In addition, Mr. McDiarmid described himself as a Certified General Accountant and/or CGA after he was no longer a member of CGA-BC. Further, he failed to respond to CGA-BC as required;
- Rules R304 – Adherence to Acknowledged Principles and Standards of Professional Practice, R305(a) - Terms of Engagement and R402 – Association with Financial Information as he did not have engagement letters or representation letters for any of the work performed for the tax years 2005 through to 2008. In addition, Mr. McDiarmid issued financial statements as a CGA when he was not registered with CGA-BC as a public practitioner and no longer a member of CGA-BC and, therefore, not able to provide public accounting services as a CGA. He knew, or ought to have known, that his association with these financial statements was false and misleading regardless of any disclaimer of responsibility he may have made in the Notice to Reader. Further, he did not file tax returns within the guidelines set out by CRA ;
- Rules R516 - Registration, R517 - Practice Review Requirements, R518 - Professional Liability Insurance, and R604(c) - Admittance to Membership as he failed to maintain his public practice registration in accordance with the requirements of CGA-BC and continued to perform public accounting services. Mr. McDiarmid was responsible for the preparation and review of financial statements and was subject to the practice review requirements, but has not been part of the practice review process since 2005. CGA-BC was not able to monitor his activities to determine if he was practicing in a fashion which met the standards of the profession. Mr. McDiarmid did not maintain professional liability insurance in accordance with the requirements set out by CGA-BC. He represented himself as a CGA, and continued to perform accounting and tax work when he was no longer permitted to do so as a CGA;
- Rule R610 – Requirement to Reply in Writing and R611(a) and (b) – Assistance to the Board as he did not: respond to telephone calls from CGA-BC or from the Investigator; respond in writing to correspondence sent to him throughout this investigation; and did not produce any documents in his possession, custody or control as requested.
- Barred from reinstatement for a period of two years, and further barred from reinstatement for an additional three years pursuant to a Consequential Order;
- fined $10,000;
- assessed costs of $10,499;
- prohibited from registering as a member or firm engaged in the practice of public accounting should he ever be readmitted as a member of the Association.