A member of the AATWA, by virtue of the AATWA Constitution & Bye Laws, has a duty of professional competence and do care. Obviously this is adapted from that of ICAN which is adapted from that of IFAC. This duty of care & competence will be broken down so that students can appreciate what it entails better.
DUTY OF CARE
At Common Law, a “duty of care” does not arise from a contract. What this means is that there is no need for a contract to exist for there to be a “duty of care”. A ” duty of care” is, in many cases, imposed on a party merely based on the capacity in which he acts. Many professional persons have this duty imposed on them.
While the AAT is not a legally recognized professional per se (only members of ICAN & ANAN are recognized as accountants by CAMA 2004), the ICAN Act of 1965 gave ICAN the right to set standards for which intending accountants must meet and to admit such qualified persons into membership. The AATWA is a professional technican body which, by inference, is comprised of professionals who ICAN has set a standard for and admitted into membership. The law might hold a member to the standards of ICAN itself in some cases. While no case law backs this for now, ICAN does discipline members of AATWA as it would its chartered accountants.
The Tort of Negligence is the Common Law concept which set the stage for the duty of care. One is said to have a duty of care to another if, by neglecting to take caution and act in a certain way he would be putting that other person in harms way. A road user has a duty of care to every other road user. He must take care in driving by observing all road regulations so as not to harm another road user. A professional lawyer has a duty of care to his client. He must make sure to represent his client in the most diligent manner possible so as to protect his interests before law enforcement & the . An auditor has the duty to exercise the highest standard of competence in conducting his audit so the party he reports to will not suffer loss as a result of material misstatements undetected. An Associate Accounting Technician (AAT), in his capacity as bookkeeper or accountant, must make sure he renders accounts which are true & fair to the standards set by the profession. Not doing so can deceive the party he reports to and that party could suffer loss.
THE STANDARD OF CARE ADOPTED BY THE LAW IS “REASONABLE CARE/SKILL”
This “Reasonable Man Doctrine” is particularly prevalent in the Law of Negligence. The “reasonable man” is a hypothetical average or common man put in the shoes of the defendant. What would a reasonable man do? This concept is important because the law would want to know when a person could be said to have discharged his duty of care or taken all “reasonable” precautions. In other words, the law wants a standard with which to measure the duty of care. That standard is the reasonable man.
Of course the reasonable man varies from case to case. There are many models of the reasonable man. If the law wanted to decide if a doctor acted as a reasonable man would, obviously the reasonable man would be a doctor also. An as the reasonable man is a man or ordinary prudence, the doctor would be expected to act as would an average practitioner of medicine in his shoes would. He would not be expected to do more than is normal. In Cassidi v Minister of Health (1951) 2QB243 it was held that the hospital authority was vicariously liable for a careless operation which worsened the plaintiffs case whether the doctors did the job for a reward or not. Lord Denning stated that “when a man goes to a doctor because he is ill, no one doubts that the doctor must exercise reasonable care and skill in his treatment…“
Thus in deciding whether an AAT member discharged his duty of care, the law would put an average AAT in the shoes of the defendant. What would an ordinary prudent and competent AAT? The GAAP, IFRSs, IPSAS, CAMA, TAX LAWS, AATWA CONSTITUTION & BYE LAWS etc are reference documents for the court to determine the reasonable skills that a reasonable AAT should have exhibited.
A hypothetical example would be where an AAT commits a material mistatement by consistently recording large sums of expense as asset thereby overstating profits and causing users to suffer loss by investing in a company which subsequently goes bankrupt.The principle that a reasonable AAT should have applied in treating the transaction might be taken from the IFRSs. But then a defense exists in Section 334 Subsection (1) of CAMA 1990 which places the duty to prepare accounts on the directors of the company. It may be unlikely that an accountant in the capacity of financial accountant would be held liable for any breach of duty arising from his negligence. Again there is the issue of vicarious liability with imposes the negligence of the servant on the master. There is no wealth of case law in this matter to decipher the view of the law. In prticular negligence cases against accountants are usually in the area of auditing which AATs cannot practice.
But one thing which is clear is that ICAN would discipline erring AATWA members. So an AAT should not undertake work he is not skilled enough to handle. Consider the text below:
Culled from AATWA Constitution & Bye Laws [ICAN]
COMPLAINTS AGAINST A MEMBER OF THE AAT
- 2.1Where a complaint is received by the Institute alleging a case of misconduct against a member of the AAT, such complaint shall be referred to the Investigating Panel for necessary action.
- 2.2 Where there is a media report alleging misconduct on the part of a member, the Panel shall investigate such a case and request for the response of the member.
- 2.3 A member against whom a complaint has been made other than deriving from an on going investigation of a complaint with which he or she is concerned as a witness or complainant shall be requested by the Investigating Panel to present his/her defence or reaction to the complaint or allegation within twenty-one (21) days of the receipt of the request to do so.
- 2.4 If the member fails to respond within the specified time, a first reminder shall be sent to him requesting him to send his defence/reaction within fourteen (14) days after the receipt of the reminder
- 2.5 If the member still fails to respond again, a second and final reminder shall be sent to him with a fourteen (14) day ultimatum within which to reply and a warning that non-response shall amount to contempt of the Institute AAT and be referred to the Executive Committee for disciplinary action.
- 2.6 If no response is received after the 3 notices, a newspaper advert may be inserted; advising him of the nature of the complaint and demanding his immediate attention, failing which the AAT Executive will be resorted to for a final determination of the members conduct.
- 2.7 The period of notices specified above may be dispensed with partly or wholly by the Panel where in the course of an investigation, it becomes just and appropriate in the view of the Panel to do so.
- 2.8 Where a non-member fails to respond after two reminders have been sent to him, the Panel shall be entitled to rely on the facts and evidence available.
- 2.9 The Panel shall be at liberty to re-open any matter upon receipt of fresh evidence or information if in the opinion of the Panel it is just to do so.
- 2.10 Where a member is known to be out of the Country temporarily or permanently, the Panel would make reasonable efforts to communicate with him at his/her overseas address, or his/her last known address. If a member fails/neglects to notify the AAT of a temporary or permanent change in his/her address, the Panel shall deem the address on the records of the AAT as the current address for the purpose of service of correspondence and notices.
- 2.11 Where the Panel is unable to contact a member, the Panel shall cause an advert to be published in two national Newspapers inviting the member to call on the registrar or panel urgently or on a specified date.
- 2.12 The Provisions and/or procedures contained in paragraphs 2.3 – 2.7 above shall apply to all other requirements or directives of the Panel to a member so that failure or neglect by the member to abide by the requirement or directive shall be treated as contempt of the AAT, and is sanctionable by the AAT Executive Committee.