An ICAEW member who stole £160,000 from a friend's limited company for his own use over a nine-year period has been excluded from membership.
Peter Featherman had been a director of the company since 1983 and once held a 30% shareholding, which was sold in 1990. He continued to be heavily involved in the affairs of the company until 2008, including making a loan to it in 1998, and provided accounting and bookkeeping services on a pro bono basis.
An ICAEW disciplinary committee tribunal found that between 1998 and 2007 Featherman used funds belonging to the company to meet his personal expenses without the permission of the directors and shareholders.
Investigation by the tribunal found that Featherman drew cheques on the bank accounts of the company for his own benefit and posted the payments to incorrect accounts in the company's nominal ledger, including the director's loan account which had a credit balance.
The exact amounts transferred in this way could not be established, but when the theft was uncovered in 2007, Featherman repaid an agreed amount of £160,000 'to the full and final satisfaction of the director and shareholders.'
However, the tribunal said that 'the use by the defendant of company money for his own use (without lawful authority) and the defendant's attempts to disguise these transactions showed dishonest intent and dishonest conduct.'
Featherman claimed that he had let his own finances become 'muddled' and 'intertwined' with the company's affairs, a defence which the tribunal rejected as 'implausible in the absence of any further evidence or adequate explanation.'
The tribunal found that Featherman's actions had caused huge loss to the company and that he had abused his position of trust. He was excluded from membership, with the recommendation that no application for readmission should be considered for five years, and ordered to pay costs of £7,800.
The ICAEW April disciplinary hearings also made an order severely reprimanding Chantrey Vellacott DFK over a complaint relating to an unqualified audit report on a public company for the year ended31 December 2009. The firm was also fined £30,000 and ordered to pay costs of £7,338.
The complaint concerned breaches of ISA 500 Audit Evidenceregarding failures to obtain and document sufficient appropriate audit evidence in respect of property, plant and equipment; development, exploration and evaluation expenditure; and going concern. There was also a failure to meet ISA 600 'Using the work of another auditor(Revised), as the firm failed to perform procedures to obtain sufficient appropriate audit evidence that the work of the auditor of the company's principal subsidiary was adequate for the principal auditor's purposes.
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