A firm was severely reprimanded, fined £17,750 and required to pay costs in respect of issuing audit reports for two clients’ financial statements when those financial statements were not approved by those charged with governance until some months later. This was in breach of International Standard on Auditing (UK) 700 ‘The independent auditor’s report on financial statements’ which requires the auditor to not date the audit report earlier than the date on which the annual report has been approved by those charged with governance.
In addition, both of those audit reports stated that the audits had been conducted in accordance with International Standards on Auditing (UK), when the firm failed to obtain sufficient appropriate audit evidence to conclude on the appropriateness of management’s use of the going concern basis of accounting in the preparation of the financial statements. This was in breach of International standard on Auditing 570 (UK) ‘Going Concern.’
A member was severely reprimanded, fined £19,600 and required to pay costs as a result of issuing audit reports in the name of his firm in respect of 11 years financial statements of one client when the firm was not a registered auditor. The first two years being contrary to section 25 of the Companies Act 1989 and the subsequent 9 years being contrary to section 1213 of the Companies Act 2006.
That individual also filed financial statements of the same client with Companies House which stated that the company was entitled to exemption from the requirement to have audited accounts under section 477 of The Companies Act 2006 when the company was not entitled to claim exemption from audit as the Articles of Association required an audit to be performed and/or when an audit had been performed and under section 449 of The Companies Act 2006, he should have notified the company directors that they should file a special report of the auditors with the accounts.
He then filed micro company accounts for the next year and abridged accounts for the year after that, both for the same client, with Companies House which stated that the company was entitled to exemption from the requirement to have audited accounts under section 477 of The Companies Act 2006, when this was not the case.
A member was severely reprimanded, fined £15,500 and required to pay costs
for failing to fulfil assurances given in respect of performing an annual Client Money Regulation compliance review and in respect notifying clients, in writing, of the basis of charging fees and the firms complaints procedure,
and for failing to comply with the Money Laundering Regulations 2007 as he did not perform:
- initial client due diligence as required by section 7;
- and / or continued client due diligence as required by section 8;
- and / or AML risk assessments as required by section 7.2;
- and / or Review the firms compliance with the regulations as required by section 2.
That member also failed to comply with Practice Assurance Regulation 4 as he failed to submit the results of the external Practice Assurance compliance review and failed to provide confirmation he had completed all client due diligence both by the date set and as required by the Practice Assurance Committee
A member was severely reprimanded, fined £6,000 and required to pay costs in respect of failing, for 18 months, to provide handover information in relation to clients’ affairs as requested by their successor accountant, contrary to paragraph 210.16 of ICAEW’s Code of Ethics.
A member was severely reprimanded, fined £2,000 and required to pay costs for failing to fulfil two assurances given on behalf of their firm at a Practice Assurance visit. Those assurances relating firstly to compliance with the Money Laundering Regulations effective from 15 December 2007 for the requirement to carry out and document risk assessments for all clients and secondly in respect of compliance with the Provisions of Services regulations 2009 in relation to the requirement to notify all clients of the firm’s PII details
Finally two fixed penalties were issued one to a member for a failure to fulfil a single assurance given in respect of Money Laundering regulations and one to another member in respect of a drink driving conviction.