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Professional Standards update: October 2022

Author: ICAEW

Published: 07 Oct 2022

This month we focus on compliance reviews, how to make the most of the process and what are the common problems firms can easily avoid. We also look at trends in the types of complaints we are receiving and the reasons for those trends. Our Audit Risk Manager has issued a reminder about your responsibilities when issuing cessation statements, following a sharp increase in the number of firms seeking new auditors, there are invitations to two live insolvency webinars and a reminder that firms will need to take part in the biennial probate diversity survey next spring. Finally don’t miss the opportunity to apply for remunerated roles on the ICAEW Regulatory Board and our regulatory and disciplinary committees.

ICAEW Regulatory Board (IRB) – vacancy for an ICAEW member

The IRB is looking to appoint an ICAEW chartered accountant member (non lay) to join the IRB. From 1 January 2023, all IRB members will be eligible to receive a fee of £385 per meeting, with pro rata payments for other commitments. Expenses are reimbursed in line with ICAEW policy.

Compliance reviews: a positive learning experience

Annual compliance reviews help firms and individuals ensure they continue to meet their regulatory obligations. Whether your reviews are mandatory or good practice, experts from ICAEW’s Quality Assurance Department offer some advice on how to make the most of the process.

Calling out unprofessional behaviour

ICAEW’s Code of Ethics outlines the standards of behaviour expected of chartered accountants. We look at recent trends in ethics complaints received by ICAEW, and ask what firms and individuals can do to prevent and report problems. The Code of Ethics applies to all ICAEW members and ICAEW member firms and requires them to adhere to five fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

Disciplinary update: October 2022

Take note of the latest disciplinary cases to ensure you or your firm are not making similar mistakes. Since the last update four tribunal orders have been published. Seven consent orders and three fixed penalty orders have also been issued by the Investigation Committee.

Auditor resignations: your responsibilities

The number of UK companies seeking new auditors has risen sharply in the last couple of years. This has shined a spotlight on the resigning auditors’ responsibilities to issue cessation statements under section 519 of the Companies Act 2006. ICAEW’s Quality Assurance Department would like to remind audit firms of their responsibilities in this area.

ISQM 1: implementation day is getting closer

With just over two months to go before audit firms need to comply with ISQM 1, we ask: are your plans in place?

New standing data forms

Help us ensure your 2023 fee renewals are correct by telling us about changes to your firm record via our new series of forms.

We have split the standing data form to make it easier for you to tell us about small changes to your firm structure.

We have also updated the mergers, acquisitions and other business changes form.

(Eligibility issues created by not keeping your firm record up to date are some of the most common issues we see.)

The 2023 fee renewals will be emailed to the relevant regulatory contact for each regulated area. Please look out for these notices during November and December.

Cryptoassets webinar recording: how to spot money laundering red flags

Our expert panel help you understand what is meant by cryptoassets, how crypto can be abused by criminals and what the warning signs or risk factors might be. They also discuss case studies and provide the view of a money laundering reporting officer.

You can also listen again to any of the other webinars presented by our AML supervision team.

Creating a buzz around AML

In our latest article on how firms are using ICAEW’s AML educational drama All Too Familiar, we talk to a money laundering reporting officer about why the film engaged staff in a way he had found difficult with more conventional approaches to training.

Apply to serve on a regulatory or disciplinary committee

We are recruiting for various roles across our regulatory and disciplinary committees. All significant decisions on regulatory and conduct matters are made by ICAEW regulatory and disciplinary committees. These committees operate independently from ICAEW staff and comprise of a parity of lay and chartered accountants with a lay chair who has a casting vote. Find out more about the expertise we are looking for, remuneration rates for accountant and lay members and how to apply.

Changes to ICAEW CPD Policy

In July 2022, following approval from Council, ICAEW announced changes to its continuing professional development policy which will apply to all ICAEW members, ICAEW member and regulated firms, and non-members who are registered with ICAEW for a regulated activity. We would like your input to help shape the policy.

Our second consultation focuses on categorisation for members working outside of practice

The consultation is open until 27 October.

2023 Probate Diversity Survey

The next probate diversity survey will take place in Spring 2023. Look out for more information, FAQs and support to conduct your survey in your inbox in the next few weeks.

Access previous probate diversity survey reports

Support for probate accredited firms

Practical guidance for probate practitioners, including the latest regulatory updates, helpsheets, and compliance information.

Access support

Invitation: Sanctions webinar for insolvency practitioners 20 October 2022

Mike Green of the Office of Financial Sanctions Implementation team within HM Treasury will be discussing sanction-related matters that insolvency practitioners should be aware of.

Invitation: An insolvency round-up from the Quality Assurance Department (QAD)

QAD will summarise the year’s common issues from monitoring reviews, relating to both personal and corporate appointments.

They will also share current areas of regulatory or stakeholder interest, and practical tips to help avoid complaints or disciplinary matters.

The event takes place on 5 December.

Bounce Bank Loan – data sharing information

Insolvency practitioners may have recently received a letter from the Insolvency Service detailing work it is undertaking to support you in working through your appointments in relation to investigations into Bounce Back Loans (BBLs).

The Insolvency Service has identified c. 20k plus cases where entities have entered insolvency post receipt of a BBL from various financial institutions who offered these with a Government backed Guarantee during the COVID-19 period.

Official Receivers have used this information to ensure that they are aware of the loan when dealing with cases and the Insolvency Service thought it would be prudent to share this information with IPs because it has received various reports of directors concealing the existence of a loan or not declaring it due to misinformation about the bank being able to claim from the British Business Bank.

The Service has started a process of informing insolvency practitioners by email that they are appointed on a case where a BBL has been registered. The email is genuine and has been sent to support your SIP 2 obligations.

If you have any queries, please email them to IPregulation.section@insolvency.gov.uk.

ICAEW’s Quality Assurance Department would like to highlight that BBL investigations fall under insolvency practitioners’ remit and you shouldn’t assume the bank has correctly validated applications or subsequent use of funds.

This topic was discussed further in our Quality Assurance Roadshow update if you would like to listen again.

Process for DLAs written off as part of corporate insolvency procedures

HMRC has designed a new voluntary process to allow a more data driven and targeted approach to the issue of Directors’ Loan Accounts (DLAs).
This specifically applies in situations where DLAs are written off as part of a corporate insolvency procedure because the debtor cannot afford to repay the loan to the company.

The process is entirely voluntary, and insolvency practitioners don’t need to use it if they don’t wish to.