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Disciplinary update: August 2022

Author: Professional Standards Department

Published: 09 Aug 2022

Since the last update, three disciplinary tribunal orders have been published. Six consent orders and three fixed penalty orders have also been issued by the Investigation Committee.

In one tribunal a former member and insolvency practitioner was severely reprimanded, fined £12,500 and required to pay costs, for a number of compliance failures in relation to appointment as liquidator of a company including:

  • repeated failures to communicate;
  • failure to progress the appointment;
  • providing incorrect information;
  • failing to send his first annual report to the prescribed persons within the prescribed period; and
  • issuing progress reports which did not comply with the Insolvency Rules (England and Wales) 2016 specifically in relation to dividend information.

A member was subject to three separate hearings on the same day relating to three unconnected complaints. He was excluded from membership with no fine but a requirement to pay costs on the first hearing, severely reprimanded, fined £5,000 and required to pay costs on the second and severely reprimanded and required to pay costs on the third.

The first hearing dealt with his failure to respond to the closing meeting of a Practice Assurance visit and his failing to fulfil a number of assurances he had given, on a previous visit, related to money laundering compliance. The second and third hearings dealt with a number of instances of failing to respond to professional enquiries in respect of a number of clients.

Finally on disciplinary tribunals a member was severely reprimanded and required to pay costs because whilst an employee, transferred data which was the property of his employer to his personal device, when he was not authorised to do so, contrary to section 150.1 of ICAEW’s Code of Ethics.

The Investigation Committee made the following orders by consent.

An audit firm was severely reprimanded and fined £17,750 for issuing unqualified audit opinions on the financial statements of two separate clients for three consecutive years which stated that the audit had been conducted in accordance with International Standards on Auditing (UK and Ireland) when the audit had not been conducted in accordance with International Standard on Auditing (UK and Ireland) 700 ‘The independent auditor’s report on the financial statements’ in that:

  • the date on the auditor’s report is not the date on which the auditor signed the audit report expressing an opinion on those financial statements;
  • and/or the auditor had not considered all necessary available evidence when the audit report was signed.

A member was severely reprimanded and fined £10,000 for failing to comply with Section 150 of the Code of Ethics, Professional Behaviour in his conduct towards an employed apprentice member of staff, as he exhibited expletive language, and/or actions towards them over an extended period.

A member was severely reprimanded and fined £6,500 because he had engaged in public practice for 8 months without holding a practising certificate, contrary to Principal Bye-law 51a. and for 18 months without professional indemnity insurance contrary to Regulation 3.1 of the Professional Indemnity Insurance Regulations.

Another member was severely reprimanded and fined £3,500 because he had failed to verify the identity of one of the beneficial owners of a client as required by the Money Laundering Regulations 2017 section 28 (4)(B) prior to the establishment of a business relationship.

Another member was severely reprimanded and fined £2,100 as he was was responsible for the preparation a client’s accounts that were incorrect in that:

  • a bank account balance in the name of an individual was accounted for as a company bank account balance; and/or
  • director’s loan account transactions were accounted for as dividends.

A member was reprimanded and fined £3,500 for disclosing information gained from a position of trust to a friend on social media, contrary to 115.1 of ICAEW’s Code of Ethics,

Three fixed penalties were issues for driving a motor vehicle after consuming alcohol in excess of the prescribed limit.