The recent criminal prosecution of Waheed Luqman, reported here, demonstrates how careful those controlling a business must be to avoid knowingly submitting misleading statements as to their business’ finances. False accounting is a criminal offence under s.933 of the Companies Act 2006 and can result in a jail sentence of up to ten years. We’ll have a look in this post at the following:
- What is the offence of false accounting?
- What are examples of false accounting?
- What are the potential consequences of false accounting?
- What should you do if you’ve been accused of false accounting?
Please note: the following article does not constitute advice and it is highly recommended that you obtain specialist advice from a criminal defence solicitor prior to taking any related action
What is the offence of false accounting?
False accounting is an offence under s.17 of the Theft Act 1968 – and an offence under s.17 Theft Act 1968 can be linked to false statements made by company directors under s.19 Theft Act 1968. Under s.17 Theft Act 1968 it is an offence if:
- Any person, dishonestly and with a view to gain for himself or another, or with intent to cause loss to another, destroys, conceals or falsifies any account or record required for any accounting purpose (s.17(1) Theft Act 1968); and/or
- Any person makes a statement that is misleading, false or deceptive in, or to omit a material particular from, an account or any other document
What are examples of false accounting?
There are various reported incidences of false accounting:
- The aforementioned Mr Luqman
- The sentencing of a London lawyer to three years’ imprisonment in 2012 for false accounting
- Three persons sentenced for role in dishonest activity at South Yorkshire Trading Standards Unit
A director may become liable for false accounting if they knowingly take any action to destroy, conceal or falsify accounts or records required for accounting purposes or makes any statement that is misleading which relates to the company’s accounts. Directors of companies should therefore be extremely careful when it comes to conveying information relating to the company accounts.
What are the potential consequences of false accounting?
The potential consequences of false accounting are the following (among others):
- Potentially going to jail
- Potentially being disqualified from acting as a company director
- Potentially being required to account for any losses caused
- Potentially being struck off if you’re part of a regulated profession
- Potentially being required to pay the costs of any investigation and prosecution
What should you do if you’ve been accused of false accounting?
If you’ve been accused of false accounting then you will probably want to obtain advice from an expert criminal defence solicitor – and possibly an employment law solicitor to explain your duties as a director of a company. Accusations of false accounting are an extremely serious defence and you’ll want to know you’re in the best position possible to defend yourself.
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