Need for Regulators to Obtain All of the Important Evidence

A regulator’s duty of disclosure applies only to the information it has. If a practitioner wishes to obtain evidence from a third party, it has to bring a motion for production. However, where the information is important to the case, the regulator takes a risk in not obtaining it themselves. In Kawula v Institute of Chartered Accountants of Saskatchewan, 2017 SKCA 70, an accountant was disciplined for not commenting, in her capacity as an auditor, on materially misleading financial statements. Throughout the proceedings Ms. Kawula attempted to obtain a copy of a report from another accounting firm which had looked into the issue. A number of participants, including the complainant and the tribunal, had prevented her from gaining access to it until well after she had been found guilty of professional misconduct. In fact a summary of the report, which later turned out not to have been fair and complete, had been admitted into evidence.

Ms. Kawula’s diligence paid off. She eventually obtained the report and persuaded the Court to receive it as fresh evidence. The Court found that it was relevant to the issues (primarily that Ms. Kawula had not been provided with all of the information when conducting her audit) and that it could have altered the outcome of the hearing. The Court directed a new hearing be held. The Court suggested that this result could have been avoided if the regulator had made more strenuous efforts to obtain the report earlier.

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