Since the last update, the outcomes of three disciplinary tribunals have been published, as well as 10 consent orders made by the Investigation Committee and three fixed penalties.
In the first disciplinary tribunal, it was ordered that a provisional member cease to be a provisional member and be ineligible for re-registration as a provisional member for a period of two years, as they had dishonestly prepared and submitted timesheets at their firm, stating that they had worked on client accounts fulfilling their contract hours when they knew they had not. They were also required to make a contribution to costs.
In the second disciplinary tribunal, published this month, a former member was severely reprimanded, fined £6,000 and subject to a remedial order that they deliver up documents within 14 days following their failure to produce the information, explanations and documents requested in a letter from ICAEW, within 28 days, as ordered by the tribunal of the Disciplinary Committee. The former member was also required to make a contribution to costs.
In the third tribunal of this edition, a former licensed insolvency practitioner (IP) and insolvency affiliate were excluded, declared ineligible to hold an insolvency licence and required to pay costs. This was following a failure, in their capacity as liquidator, to:
- send seven annual progress reports to the firm within the required time limits in the three Members' Voluntary Liquidations listed, resulting in breaches of Rule 4.49C-CVL of the Insolvency Rules 1986 or Rule 18.7 of the Insolvency (England & Wales) Rules 2016;
- send 142 annual progress reports to the firm within the required time limits in the 46 Creditors' Voluntary Liquidations listed, resulting in breaches of Rule 4.49C of the Insolvency Rules 1986 or Rule 18.7 of the Insolvency (England & Wales) Rules 2016; and
- send 23 annual progress reports to the firm within the required time limits in the four Compulsory Liquidations listed, resulting in breaches of Rule 4.49B of the Insolvency Rules 1986 or Rule 18.8 of the Insolvency (England & Wales) Rules 2016.
Further, they had failed to comply with the Fundamental Principle of Professional Competence and Due Care at paragraph 400.4(c) of the Code of Ethics Part D as they failed to send 172 progress reports to the firm within the required time limits in the 53 insolvency appointments listed.
Consent orders made by the Investigation Committee and published this month were that:
A firm was reprimanded and fined £194,600 because it had issued an unmodified audit opinion on the financial statements of a plc which stated that:
a) the audit had been conducted in accordance with International Standards on Auditing (UK), when it had not been conducted in accordance with International Standard on Auditing 500, 'Audit Evidence', in that the audit team failed to obtain sufficient, appropriate audit evidence in relation to:
i. completeness, existence and valuation of inventory; and/or
ii. completeness of trade creditors; and/or
b) the financial statements had been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union when they did not comply with the requirement of International Accounting Standard 12 'Income Taxes', in that they failed to recognise a deferred tax liability in relation to acquired intangible assets in respect of the acquisition of a limited company.
A member was severely reprimanded and fined £10,000, as they had failed to progress the liquidation of a limited company in a diligent manner, which is contrary to the fundamental principle of professional competence and due care set out in paragraph 400.4c of Part D of the Code of Ethics.
A member was severely reprimanded and fined £7,175 for a series of compliance failures in that they failed to:
- notify the Members' Registrar of ICAEW of the formation of their limited company practice and ensure that their firm was supervised by an appropriate anti-money laundering supervisory authority;
- ensure that their firm complied with regulation 10 of the Clients' Money Regulations, in that they allowed the firm to receive significant sums of client monies, which was not immediately paid into a client bank account; and
- ensure that their firm complied with regulation 13 of the Clients' Money Regulations, as money in excess of £10,000 for any one client was held for more than 30 days without being paid into a separately designated bank account in the name of the relevant client.
Another member was severely reprimanded and fined £5,000 because they had not ensured that their firm had complied with regulation 40 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, in that they did not retain copies of documents and information obtained in order to satisfy the customer due diligence measures and ongoing monitoring and risk assessment and management in relation to their client.
They also failed to prepare the self-employed accounts of their client in a timely manner and failed to complete and/or file the 'Self Assessment tax return' for their client with HMRC. Finally, they failed to cause their client's formal complaint sent by chat message to be investigated by a principal of their firm as required by Disciplinary Bye-law 11.2.
A member was severely reprimanded and fined £4,900 because they failed to cause a complaint to be investigated by a principal of the firm as required by Disciplinary Bye-law 11.2 and/or failed to take action to implement safeguards to address the independence threat raised by that complainant.
Another member was severely reprimanded and fined £4,200 because they had failed to notify the Members' Registrar of ICAEW about the formation of their firm as required by the following regulations:
- within 20 business days, as required by Practice Assurance Regulation 9 (effective 1 January 2008 until 30 June 2019); and/or within 10 business days, as required by Practice Assurance Regulation 13 (effective from 1 July 2019); and/or
- within 28 days, as required by the Information to be Supplied by Members Regulations, regulation 3 (effective from 1 December 2010); and
- engaged in public practice through their firm, without professional indemnity insurance (PII), contrary to regulation 3.1 of the PII Regulations; and
- failed to ensure that their firm was supervised by an appropriate anti-money laundering supervisory authority contrary to:
- Parts 1-6 of The Money Laundering Regulations 2007 (effective 15 December 2007 until 25 June 2017); and/or
- Regulation 8 and Parts 1-6 and 8-11 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (effective from 26 June 2017).
A member was severely reprimanded and fined £3,500 because they had engaged in public practice contrary to ACA Student Regulation 20, engaged in public practice without holding an ICAEW practising certificate, contrary to Principal Bye-law 51a, breached the Information to be Supplied by Members Regulation 3 as they did not inform ICAEW that they were a director of their limited company practice, failed to ensure their firm was supervised by an appropriate anti-money laundering supervisory authority contrary to regulation 8 and Parts 1-6 and 8-11 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and finally engaged in public practice without PII contrary to regulation 3.1 of the PII Regulations.
Another member was severely reprimanded and fined £2,100 because they shared with colleagues, by email, their answers to the mandatory 'Update for Auditors' quarterly internal e-training when they knew, or should have known, they should not do so. These actions were contrary to R115.1 of ICAEW's Code of Ethics.
A member was severely reprimanded as a result of their convictions for:
- driving a motor vehicle with a concentration of a specified controlled drug (Benzoylecgonine) above the specified limit, contrary to section 5A of the Road Traffic Act 1998, breaching requirement 150.1 of the ICAEW Code of Ethics (effective 1 January 2011 – 31 December 2019); and
- affray, contrary to section 3 of the Public Order Act 1986.
The last consent order published since the last edition related to a member who was reprimanded because they had engaged in public practice without holding a practising certificate contrary to Principal Bye-law 51a and without PII contrary to regulation 3.1 of the PII Regulations. They also failed to notify the Members' Registrar of ICAEW of the formation of their practice within 28 days as required by the Information to be Supplied by Members Regulation 3 and failed to ensure that their firm was supervised by an appropriate anti-money laundering supervisory authority.
All of the above consent orders included a requirement to pay costs.
Three fixed penalty notices were published since the last update. Two were for two separate cases of driving a motor vehicle on a public road, having consumed alcohol in excess of the prescribed limit, contrary to Section 5(1)(a) of the Road Traffic Act 1988 and Schedule 2 to the Road Traffic Offenders Act 1988.
The third fixed penalty was issued in respect of a summary conviction for pursuing a course of conduct which amounted to stalking, involving serious harm or distress under section 4A(1)(b)(ii) and (5) of the Protection from Harassment Act 1997.
Further details can be found on our Disciplinary Database or please visit our Public Hearings page.