MP Condemns unethical conduct of the ACCA (first published in Accountancy Age on 8 April 1999)

View from the House - Jim
 Pinochet will make his mark on our professional
 regulation yet.

 Recently, the Law Lords had to consider Lord
 Hoffman's involvement in the original House of
 Lords judgement on Pinochet.

 Lord Hoffman was the director of a charity
 closely affiliated with Amnesty International. The
 Law Lords held this involvement had the
 potential to appear to bias Lord Hoffman's
 judgement. The judgement given on 25
 November 1998 was set aside.

 This has profound implications for every
 profession. And for the Financial Services and
 Markets Bill now before parliament, the
 expected Bill on limited liability and the current
 consultation on company law reform.

 In accountancy, fellow professionals are
 frequently involved in assessing complaints. The
 'Hoffman test' does not debar all involvement in
 professional matters, but it does indicate a very
 wide-ranging standard for potential personal bias
 to be tested in each specific case and on each
 specific issue. Disbarment, on the basis of bias,
 from considering complaints, disciplinary action
 or for any quasi-judicial role, must from now on
 be widely examined.

 The accountancy bodies now need to show that
 no-one sits in judgement or adjudicates a
 complaint in which they have a 'Hoffman

 But what actually happens? An ACCA member
 alleged that the association's 1997 accounts
 were misleading. It was claimed they made no
 mention of the allegations of plagiarism in
 Malaysia and the lawsuits or contingent liabilities
 that might result; and that the accounts failed to
 disclose amounts which office-holders might
 have charged to the association for taking their
 spouses with them on their travels.

 ACCA does not have an independent
 ombudsman to adjudicate disputes between
 members and officials, so the complaint was sent
 to the chief executive, who is involved with the
 preparation of accounts. Whatever the merits of
 the complaint, the Hoffman test suggests that it
 should have been examined by a fully
 independent party with no involvement in the
 accounts. But it was not.

 So parliament must be satisfied that all
 regulators, and all regulatory regimes, pass the
 Hoffman test.

 Jim Cousins is Labour MP for Newcastle Central