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Professional Standards Department: July update

Author: Professional Standards Department

Published: 07 Jul 2022

In this month’s update we provide further information on upcoming changes to the disciplinary framework and the recently announced ban on UK accountants in Russia. We speak to a small independent practice who tell us how they are using our latest training film All Too Familiar and we explain our monitoring approach to the implementation of ISQM1.

In this issue:

A disciplinary framework fit for the future

ICAEW’s disciplinary framework is being simplified and updated to make it more efficient and accessible. Ahead of the changes, Duncan Wiggetts, ICAEW’s Chief Officer for Professional Standards, explains the rationale behind the reforms and discusses how the revamped framework better meets the needs of a modern regulator.

Locking Russia out of UK accountancy services

UK foreign secretary, Liz Truss, recently announced a ban on providing accountancy services to Russian businesses. As the sector awaits further details and a timetable for implementing these latest sanctions, Michelle Giddings, ICAEW’s Head of AML, outlines the likely implications and what firms can start doing to prepare.

Russian export sanctions prohibitions (US and EU)

New guidance on the professional services that have been prohibited and the organisations and individuals that are impacted by EU and US export prohibitions.

AML supervision team webinar: cryptoassets

The cryptocurrency space is dynamic and fast-moving. Products and services widely available in the industry today could not have existed a decade ago.

Cryptoassets, under the National Risk Assessment of Money Laundering and Terrorist Financing 2020, have increased to a medium risk area and criminals are increasingly using and incorporating them into money laundering methodologies.

We have invited the National Crime Agency and anti-money laundering professionals to join ICAEW in this webinar that aims to:

  • Help you understand what is meant by cryptoassets.
  • Advise you on how crypto can be abused by criminals.
  • Help you to spot the red flags and the money laundering methodologies.

The webinar is taking place on 21 September 2022 at 12:00-13:30.

AML webinar: listen again to our webinar on client verification

The panel use case studies to demonstrate the stages of client verification and how these should link to your anti-money laundering (AML) risk assessment in the latest webinar from our AML supervision team.

Clients' Money helpsheet

This helpsheet outlines the regulations governing the handling, banking and return of money held on behalf of clients.

Our monitoring approach to the implementation of ISQM1

ISQM1 and the system of quality management (SoQM) represent a significant change from ISQC1 requirements. The new SoQM will ensure that your audit procedures evolve with your audit firm and its clients, with key components of risk assessment, monitoring and evaluation.

Many of your firm’s existing quality control policies and procedures will remain relevant within the new framework and originate in UK Audit Regulations that pre-date the original ISQC1 in 2005. However, you should take this opportunity to reassess, refresh and update existing procedures.

Audit monitoring visits update: the risk-based approach

ICAEW is required by law to conduct monitoring visits to all firms registered for audit. As required by statute, we use a risk-based approach to select firms for visits. All firms will be familiar with the six-year visit cycle but also need to be aware that they may be selected for monitoring visits more frequently.

In response to changes in the audit market, the growth of challenger firms and some more complex audits moving away from the largest audit firms, we are increasing our activities to monitor the audits undertaken across firms registered for audit with ICAEW.

This means that more firms may be selected for accelerated monitoring visits, and we will also be contacting some firms between monitoring visits about particular audit clients, or groups of audit clients.

Irish Audit Regulations revised

Firms registered for audit in Ireland with Chartered Accountants Ireland (CAI) are reminded that CAI has recently issued new stand-alone Audit Regulations for Ireland. The Audit Regulations Ireland replace the Audit Regulations and Guidance (effective 1 January 2020) and the addendum effective 22 December 2021.

The new Audit Regulations Ireland include new RI CPD obligations and a new requirement for practice continuity (alternate) arrangements for sole practice audit firms.

The UK regulations are due to be updated later this year and may include elements of these Irish changes.

The issue of these separate Irish regulations ends the use of joint regulations for the two countries which had been in operation from 1995.

Upholding the highest standards: The ICAEW Regulatory and Conduct Report 2021-2022

Read about our strategy, activities and the oversight of ICAEW’s regulatory and conduct role in the Regulatory and Conduct Report 2021-2022.

Hitting a nerve: ICAEW's latest training film

All Too Familiar, an educational drama created by ICAEW in collaboration with HMRC, examines the powerful role of professional scepticism in reducing the risk of economic crime. In the first of a series of articles looking at the different ways firms of all sizes are using the film to inform and train staff, we talk to a senior partner in a small independent practice.

ICAEW Regulatory Board updates: latest papers

The ICAEW Regulatory Board oversees ICAEW’s Regulatory and Disciplinary work. Find out what is being discussed at recent meetings.

Disciplinary update: July 2022

Take note of the latest disciplinary cases to ensure your firm is not making similar mistakes.

Enforcement notice: debt management ads by insolvency practitioners

The Advertising Standards Agency (ASA) and the Committee of Advertising Practice have issued an enforcement notice regarding debt management adverts by insolvency practitioners and lead generation companies.

The Notice states that 'Adverts targeted at consumers with debt problems have the potential to cause serious detriment if they do not comply with the advertising rules. Insolvency practitioners and lead generation companies which ultimately advertise an IVA/PTD service must be extremely careful to ensure their advertising is responsible and does not mislead.'

The Notice applies to ads in all media placed by UK companies or targeted at UK consumers. This includes paid-for ads in all traditional and digital media, including TV and radio, and non-paid-for advertising online, such as websites, email marketing and any social media presence you may have, including influencer and affiliate marketing.

Insolvency practitioners should read the notice to understand the kinds of advertising that are prohibited. The ASA will begin targeted monitoring and enforcement on 25 July 2022.

HMRC guidance: VAT returns

Find out how best to submit VAT returns so they are processed efficiently, including how to submit them using HMRC’s new IT system.

Webinar: Pension issues for insolvency practitioners

A comprehensive round-up of all relevant pension scheme matters for insolvency professionals. This webinar will guide you through practical issues faced with company pension schemes and address statutory requirements and common issues such as working with Auto Enrolment providers, calculating unpaid pension contribution claims and determining which pension liabilities transfer under TUPE.

Restructuring & Insolvency Conference recordings

Book onto the event to watch recordings of the 2022 Restructuring & Insolvency Conference.

Disciplinary Committee chair creates a stir

It’s not an obvious leap from chartered accountant to marmalade maker extraordinaire, but Mike Ranson has done it, with his winning creation now on sale at Fortnum & Mason, no less.

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