An accountant has learned the hard way that it's never a good idea to string along the inspectors, particularly over matters of money laundering and risk controls.

An accountant caught lying about his firm’s anti-money laundering controls has been disqualified from the Association of Chartered Certified Accountants (ACCA) and fined £6,000.

Hans Chung Han Hung told ACCA supervisors in 2020 his firm, Hans Hung & Co, had put anti-money laundering (AML) policies in place in 2018.

However, despite multiple requests for proof, none came, and the London-based accountant repeatedly ducked inspectors and failed to cooperate with orders.

The offence is considered one of the most severe breaches of ethical standards and landed Huang with the full weight of ACCA sanctions; his membership of ACCA was revoked for five years and he must cover the body’s legal expenses.

Severest breaches possible

Hung held the roles of Money Laundering Reporting Officer and Compliance Principal at his own firm, but refused to comply with requests from ACCA to show his practice had the necessary policies in place to stop the flow of suspect funds passing through his business.

Repeated calls to his office from ACCA officials were ignored, and when finally confronted, Hung lied to the investigating officer and provided false documentation.

Staff had received no training on AML matters, and the firm itself had not undergone any kind of risk assessment.

Some high-risk clients were not treated as such, inspectors later found, whilst others were incorrectly categorised as medium-risk when their activities should have been subject to much higher scrutiny, inspectors found.

Most telling, the firm’s AML policy and procedures document, which Hung said had been created in October 2018, was in the form of an ACCA’s fact sheet on dirty money policy and procedures, which had only been published in February 2020.

Presenting Hung with the evidence in October 2020, it took until March 2021 for ACCA officials to get any response from Hung that would move the case forward.

In defending his case, Hung said his clients were mainly cash-heavy Chinese take-aways and restaurants, had always tried to uphold standards having worked in accountancy for more than 40 years, and he was ashamed by his own dishonesty.

The ACCA disciplinary committee found that Hung had breached several of its ethical codes, including those relating to integrity, professional competence, and due care. Hung was accused of dishonesty, and of undermining the profession's reputation.

The price of dishonesty

As a result, the ACCA excluded Hung from membership for a period of five years and was ordered to pay £6,000 towards the body’s legal costs (the ACCA had asked for more than £9,000 initially).

During this time, Hung will not be permitted to use the ACCA letters after his name or describe himself as a member of the ACCA. 

The case serves as a warning to other accountants about the importance of implementing robust AML policies and complying with ethical codes, experts said.

An ACCA spokesperson said that the body takes breaches of its codes very seriously and will take action against those who do not meet its high standards.

The consequences of breaching ethical codes can be severe, and accountants must ensure that they are always acting with integrity and professionalism to maintain the public's trust in the profession, they added.

“The case should serve as a good reminder for all accountants, particularly sole practitioners, to fully review their compliance with anti-money laundering regulations,” said Alison Wood, associate regulatory lawyer at Blake Morgan. “Any proven failure by a member to co-operate with their regulator will not go down well with the committee.”

Some commentators have expressed sympathy for Hung, noting the levels of bureaucracy, box-ticking and paperwork required to navigate the ACCA’s AML requirements.

“No doubt he could have retained his ACCA membership if he had dealt with his regulator more sensibly, but I do have some sympathy regarding the cost/benefit of the AML regime for accountants,” added David Winch, ACCA member and forensic accounting specialist.

Presenting Hung with the evidence in October 2020, it took until March 2021 for ACCA officials to get any response from Hung that would move the case forward.

In defending his case, Hung said his clients were mainly cash-heavy Chinese take-aways and restaurants, had always tried to uphold standards having worked in accountancy for more than 40 years, and he was ashamed by his own dishonesty.

The ACCA disciplinary committee found that Hung had breached several of its ethical codes, including those relating to integrity, professional competence, and due care. Hung was accused of dishonesty, and of undermining the profession's reputation.