A corporate governance consultancy firm has raised questions about standards at Chartered Accountants Ireland (CAI) and the objectivity of its disciplinary processes stretching back a decade.
In a new report sent to CAI on May 4th and seen by The Irish Times, Governance Ireland (GI) — a third-party consultancy and advisory firm based in Dublin — said it identified “clear deficiencies” in an independent review carried out on foot of allegations of unethical behaviour made by Dublin accountant and CAI member James Fennelly.
Mr Fennelly, who commissioned GI to compile the report, raised questions about a protracted disciplinary process against him that was initially thrown out in 2016 after CAI found there was no prima facie evidence for him to answer, only settling in April 2019 when the body withdrew its case.
In response to queries, a spokeswoman for CAI said the institute does not comment on disciplinary or related matters. “Furthermore, we do not comment on third party opinions, commissioned by complainants.”
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Despite being thrown out in 2016, the complaint process became “a protracted one”, GI said, when the complainant called for a review of the decision.
CAI and Mr Fennelly ultimately settled in April 2019. According to GI’s report, CAI in 2019 agreed to pay €200,000 towards Mr Fennelly’s legal costs “in full and final settlement of the disciplinary matter”. The agreement was not to be “construed as an admission by CAI of a breach of any statute, regulation or law” and was entered “without any admission of liability”.
In 2021, CAI was admonished by the Irish Auditing & Accounting Supervisory Authority for the procedural missteps that prolonged the matter.
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Mr Fennelly also raised his own questions about the process that led to the review at a special general meeting for CAI members in 2019. He asked whether CAI was confident all members involved in disciplining members acted ethically in deciding that the complaint should be reviewed again after it was initially thrown out, a decision that effectively drew out the process for another three years after it was shelved in April 2016.
The issues raised led to an independent review of the case. Rather than appoint an external candidate, a CAI council member was appointed by the institute’s oversight committee to lead the review, which ultimately found no evidence of unethical behaviour.
GI, which said it had no engagement from CAI throughout the compilation of its report, said this process had “clear deficiencies”. GI concluded, among other things, that CAI’s position that the review was independent “is not credible”. It said: “CAI should accept that the review into Mr Fennelly’s complaint does not qualify as an ‘independent review’, and CAI should agree an approach with Mr Fennelly to clarify the matter in a mutually acceptable manner and correct the record in respect of what has been communicated to members, at the 2020, 2021 and 2022 agms [annual general meetings], and draw the matter to final conclusion.”
Mr Fennelly said: “CAI have not conducted themselves appropriately. The report was commissioned from GI arising from concerns regarding serious governance failures at CAI. The GI conclusion that successive CAI presidents have made statements which are not credible speaks for itself.”
CAI is holding its annual general meeting on Friday where questions about the matter are expected to be raised.
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