16 MARCH 2006

NEW ZEALAND GAZETTE, No. 25

Tuhoe Ki Waitaha Inc.
Turangi Sports Inc.
Ucandance Club Inc.
Wairoa Playcentre Inc.
Wellington Vauxhall-Bedford Club Inc.

667

Work & Income Northland Staff Inc.
Y Team (Wairarapa) Inc.

Dated this 16th day of March 2006.
NEVILLE HARRIS, Registrar of Incorporated Societies.
is1657

General Notices

Notice of Decision of the Disciplinary Tribunal

of the Institute of Chartered Accountants of
New Zealand (Member Guilty of Misconduct in a
Professional Capacity, Negligence or Incompetence
in a Professional Capacity, and Breaching the
Institute’s Rules and Code of Ethics)

At a hearing of the Disciplinary Tribunal of the Institute of
Chartered Accountants of New Zealand held in public on
the 2nd day of March 2006, at which the member was in
attendance by teleconference and was represented by
counsel, Richard Gregory Smithson, of Rangiora, pleaded
guilty to the following charges (1), (2), (3), (4) and (5) and
admitted the following particulars (a), (b), (c), (d), (e), (f),
(g), (h) and a second set of particulars (a), (b), (c) and (d).

Charges

THAT in terms of the Institute of Chartered Accountants of
New Zealand Act 1996 and the Rules made thereunder, and
in particular Rule 21.30, the member is guilty of:

1. misconduct in a professional capacity; and/or
2. negligence or incompetence in a professional
   capacity, and this has been of such a degree as to
   reflect on his fitness to practise as an accountant;
   and/or
3. breaching the Rules or the Code of Ethics
   (particularly Rule 21.2, Code of Ethics Rules 10 and
   11, PS-2); and/or
4. failing to respond promptly to communications from
   the institute; and/or
5. failing to pay a sum due to the institute by the date
   specified for payment.

Particulars

IN THAT being a member of the Institute of Chartered
Accountants of New Zealand and in relation to a complaint,
the member:

(a) invested funds of organisation A into the company
Scarba Fifty One Limited ("SFO Limited") without
gaining approval at a general meeting, as required
by the rules of the organisation;

(b) invested funds of organisation A into SFO Limited
without the prior written authority of the organisation,
in breach of Professional Standard No. 2 "Client
Monies and Members’ Trust Accounts" ("PS-2")
(paragraph 41);

(c) invested funds of organisation A into SFO Limited,
a company of which he was the sole shareholder and
director, in breach of PS-2 (paragraph 43);

(d) failed to repay to organisation A all the funds
invested in SFO Limited, when requested to do so;

(e) failed to pay to organisation A, within a reasonable
period of time, the interest that is due to them from
their investment in SFO Limited;

(f) did not fully disclose organisation A’s investment
in SFO Limited in the 2002 financial statements of
organisation A;

(g) did not fully disclose organisation A’s investment
in SFO Limited in the 2002 financial statements of
SFO Limited;

(h) failed to respond to a complaint about this conduct
within the period specified in Rule 21.2 (b).

And, in his role as a chartered accountant in public practice,
the member:

(a) has breached PS-2, in that funds that are direct
credited into his client trust account do not have
deposit details recorded (paragraph 24);

(b) has breached PS-2, in that numerous clients in his
trust account had and/or continue to have overdrawn
balances (paragraph 28);

(c) has breached PS-2, in that he is unable to provide
client authority for the offset of fees charged against
Inland Revenue Department refunds (paragraph 30);

(d) failed to pay his 2006 institute membership fees by
the due date of 31 July 2005.

Reasons

The tribunal need to have regard to the protection of the
public and the institute. The offences were over a long
period of time and go beyond mere incompetence or
carelessness and relate to serious mishandling of other
people’s money, and this is not acceptable behaviour for
a member of the institute.

Orders of the Tribunal

(a) Pursuant to Rule 21.31 (a) of the Rules of the
Institute of Chartered Accountants of New Zealand,
the disciplinary tribunal ordered that the name of
Richard Gregory Smithson be removed from
the institute’s Register of members.

(b) Pursuant to Rule 21.33 of the Rules of the Institute
of Chartered Accountants of New Zealand, the
disciplinary tribunal ordered that Richard Gregory
Smithson pay to the institute the sum of $9,800.00
(inclusive of G.S.T.) in respect of the costs and
expenses of the hearing before the disciplinary
tribunal and the investigation by the professional
conduct committee.

In accordance with Rule 21.35 of the Rules of the Institute
of Chartered Accountants of New Zealand, the disciplinary
tribunal directed that the decision of the tribunal be
published in the Chartered Accountants Journal, the
New Zealand Gazette and the Christchurch Press with
mention of the member’s name and locality.

Right of Appeal

Pursuant to Rule 21.41 of the Rules of the Institute of
Chartered Accountants of New Zealand which were in force
at the time of the original notice of complaint, the member
may, not later than 14 days after the notification of this