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.
The Member was issued a Juricert identification certificate by the Law Society of British Columbia (LSBC). Contrary to the Terms and Conditions that the Member agreed to when he obtained the Juricert, the Member permitted another person, a family member, to have access to their Juricert identification. That person filed a false and misleading Trust Report to the LSBC.
The Investigation Committee determined that the Member contravened the following Rules of the CPABC Code of Professional Conduct:
201.1 - Maintenance of the good reputation of the profession
205(a) - False or misleading documents
The Committee recommended the Member:
- accept a reprimand;
- pay a fine of $2,000; and
- pay investigation expenses of $1,473.
Mr. Desai was retained by a law firm to complete the accountant’s portion of the annual Trust Report which the law firm was required to submit to the Law Society of British Columbia (LSBC). Mr. Desai completed the relevant portions of the Trust Report and attested that the law firm was in compliance with all LSBC rules for trust accounting. The LSBC subsequently conducted an audit of the law firm which revealed numerous breaches of LSBC requirements, including failure to maintain books and records, a trust shortage and deficient trust reconciliations.
Mr. Desai:
- Did not have the professional competence or expertise to carry out the engagement with the law firm diligently or with due care
- Falsely attested that the law firm was in compliance with all LSBC rules when he knew the law firm was in breach of numerous rules
- Used the Juricert identification of another person to sign and file the trust report
- Was not independent of the law firm in this engagement, as he prepared some of the bookkeeping upon which he was required to attest.
The Investigation Committee determined Mr. Desai contravened the CPABC Code of Professional Conduct as follows:
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
204.1 - Assurance and specified auditing procedures engagements
205(a) - False or misleading documents
206.1 - Compliance with professional standards
The Committee recommended Mr. Desai:
- accept a reprimand;
- pay a fine of $10,000; and
- pay investigation expenses of $2,759.