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Professional Standards Update – May 2021

Author: Duncan Wiggetts

Published: 29 Apr 2021

Professional Standards update for May from Chief Officer Duncan Wiggetts.

If you have not already received a copy of it, I would recommend that you spend a few minutes reading through the 2020 Annual Report of the ICAEW Regulatory Board (IRB) which Michael Caplan QC, the IRB Chair, presented to the ICAEW Board at its meeting on 20 April. The report sets out the areas of focus of the IRB during 2020, its views on developments in our regulated areas and details the projects which the IRB intends to undertake during 2021. I was pleased to be asked to contribute an operational summary for 2020 and to have the opportunity within that section to pay tribute to the great efforts made by my management team and all PSD staff to maintain our regulatory and disciplinary functions with minimal disruption despite challenges thrown up by the lockdowns.

Michael has kindly taken time out of his busy schedule to be interviewed about the 2020 report and the evolving role of the IRB which is responsible for overseeing the functions of PSD and all of the disciplinary and regulatory committees.

New disciplinary framework

I mentioned in my update last month about the approval given by ICAEW Council in March to the proposal from the IRB that alterations be made to ICAEW’s disciplinary framework and I promised to provide more insight into the reasons why the IRB considered that changes should be made. In essence, there are two main drivers for changing the existing framework:

Lack of clarity / accessibility

ICAEW’s disciplinary framework has not been reviewed as recently as other professional bodies and some of the terminology in the provisions is archaic and many provisions are not written in ‘plain English’. Indeed, the disciplinary bye-laws (DBLs) still contain some Latin phrases! It has become increasingly difficult for the IRB to insert additional processes into the existing DBLs (eg, the fitness to practise process) and make those additions knit easily with the original structure and language. The IRB set as an objective for the executive team making the new disciplinary framework much easier to understand for members and complainants alike.

Lack of agility to make changes to disciplinary processes

ICAEW is currently unique among accountancy professional bodies in holding all of the provisions relating to its disciplinary scheme within its DBLs. No amendment can be made under the current governance processes to any DBL without the amendment recommended by the IRB being first approved by ICAEW Board, ICAEW Council and members at Special General Meeting and, even then, the changes cannot be made until they have been approved by the Privy Council. While the concurrent proposal to amend the Supplemental Charter to transfer DBL change approval from members to Council will shorten this year-long time frame, the time taken to correct an unfair outcome resulting from a process or to close a loophole will still be too long. Therefore, the IRB considered that it would be sensible to separate the core substantive DBLs from those provisions which relate only to process and for the latter to be changed into regulations to sit within the new Investigations and Disciplinary Regulations (IDRs) and for changes to those process provisions being possible just on approval by the IRB.

The changes being proposed – a reduction in the number of current DBLs from 49 to 16 and the moving of the remaining provisions into the IDRs together with improvements to enhance the clarity and consistency of the retained DBLs – will help to bring ICAEW into line with the disciplinary frameworks currently operated by other accountancy bodies like the ACCA, CAI and ICAS. The Supplemental Charter change will also allow ICAEW Council to delegate even future changes to the DBLs to the IRB.

I hope that members and firms will see this as a laudable initiative and one which you will be prepared to support by casting your vote in favour in advance of the SGM on 2 June.

New times – new complaints

Just when our experienced Professional Conduct case managers thought they had seen it all, a trickle which has become a stream of complaints about unprofessional behaviour in the use of social media and in complying with the legislation introduced around the COVID pandemic has brought a new dimension to the complaints we receive. So this month, I have asked the Professional Conduct investigation team to write an article describing what we are seeing in recent complaints and providing advice on how to avoid being the subject of a complaint in these areas. The article also provides some practical guidance and tips on how firms and individuals can benefit from using social media while ensuring the highest standards of professional conduct is maintained.

Take professional scepticism to the next level

Professional scepticism, and the need for a critical and questioning mind, is fundamental to the role of accountants. And yet often, the tell-tale signs of criminal activity lurking in the accounts continue to be overlooked, often because accountants aren’t aware of them. Joanna Bliault, a forensic accountant at the Metropolitan Police, urges accountants to take their professional scepticism to the next level and act on the most common red flags she has encountered in the line of duty.

Disciplinary update

The Disciplinary Update for this month is now also available and I am going to encourage you again to take a few minutes to read through a summary of the type of conduct which has led in recent times to disciplinary records for some ICAEW members and firms and to make a mental note not to replicate any such conduct. While the names of members and firms are not included in the summary, further details of all of the conduct issues mentioned can be found on the link provided on that page.

Monitoring feedback surveys

Firms and insolvency practitioners (IPs) regulated and supervised by ICAEW are the subject of visits by our Quality Assurance Department (QAD) from time to time to review the quality of regulated work and how practices are run so that the public and business clients can be assured that the highest professional standards are maintained when using the services of a chartered accountant or firm.

After every review, the firm/IP is asked to complete an anonymous feedback survey on the their experience leading up to, during and after the completion of the visit. The responses are independently collated and reviewed by a market research agency and the QAD directors and I receive a summary of the feedback on a quarterly basis so that we can assess whether any improvements can be made to our processes to make the visits more efficient and effective. I am delighted to report that year on year, our firms and IPs rate the quality of the visit and the interaction with our QAD reviewers as excellent and we will shortly begin to release these results publicly.

Meanwhile can I urge firms and IPs to continue to complete the surveys so that we can continue to improve our quality assurance monitoring processes. If you or your firm has had a recent review and you’ve not yet submitted your feedback, please use this link.

Your feedback

As always, we welcome your feedback. Please let us know if there is anything you’d like to see included in a future issue of Regulatory & Conduct News or on our new Regulation & Conduct LinkedIn page. 

Duncan Wiggetts, Chief Officer, Professional Standards