In this month's update we share: examples of good practice that have been identified during recent monitoring visits to audit firms; the results of our recent AML thematic reviews focusing on COVID support schemes and sanctions; and the findings of the Quality Assurance public sector monitoring activity in 2021-22. We also look at the difference between independent and restricted financial advisers, issue clarification regarding the Insolvency Code of Ethics' and highlight the latest disciplinary cases.
How accountancy firms are helping to detect COVID fraud
ICAEW firms are playing a key role in identifying and dealing with COVID fraud. We talk to Michelle Giddings, ICAEW’s Head of AML, about a recent survey that shows how firms are encouraging clients to pay back ineligible claims, and supporting law enforcement by reporting fraudulent activities.
Disciplinary update: November 2022
Take note of the latest disciplinary cases to ensure you or your firm are not making similar mistakes.
New disciplinary framework progresses to final approval
The proposed framework has been approved by the Legal Services Board and will now go to the Privy Council for the final stage of the process. It is expected to be implemented in spring 2023.
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.
Look out for fee renewal notices in your inbox
These will be emailed to you during November and December. These emails replace the previously posted paper copies.
ICAEW Regulatory Board papers
Good practice when taking on new audits
Recent intelligence shows that there are significant numbers of UK companies seeking new auditors and that the audit tender market is buoyant. ICAEW’s Quality Assurance Department share examples of good practice that have been identified during recent calls and visits to audit firms.
PIE audits: new registration requirements
The regulatory regime for firms auditing Public Interest Entities (PIEs) is changing. We look at new FRC registration requirements, plans to expand the definition of a PIE, and what audit firms need to consider now and in future.
ISA 600: what’s new in group audits?
New requirements for the audit of groups are being introduced for periods beginning on or after 15 December 2023. What are the key changes and what will this mean for you as a group or component auditor?
Local audit quality inspection results published
88% of financial audit reviews carried out by ICAEW’s Quality Assurance Department (QAD) in 2021-22 were graded good or generally acceptable. The results of these reviews form part of the Financial Reporting Council’s (FRC) summary report on 2021/22 local audit inspections. Overall, the FRC rated 70% of local audits as good or only requiring limited improvements.
Watch our short video which summarises the findings of QAD’s public sector monitoring activity in 2021-22.
Trevor Smith, Director, Quality Assurance said “While recognising there are areas for improvement, we are pleased to see that the number of audits categorised as good or requiring limited improvements has remained consistent with 2020/21.”
As the sole Recognised Supervisory Body (RSB) for local audit, ICAEW is responsible for the licensing, registering and monitoring of auditors who carry out audits of relevant authorities, as defined in schedule 2 of the Local Audit and Accountability Act 2014.
Referrals to financial advisers: staying compliant
When accountancy firms refer clients to financial advisers, they need to consider a range of regulatory and ethical issues. We look at the difference between independent and restricted advisers, and discuss how you can ensure you stay compliant with ICAEW’s Code of Ethics and legal requirements.
Insolvency Code of Ethics – Internal Audit
Read clarification issued by the Recognised Professional Bodies regarding the Insolvency Code of Ethics' reference to 'audit related work'.
Invitation: An insolvency round-up from the Quality Assurance Department
The team 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.
The accountant’s role in the rogue director crackdown
New rules make it easier to reprimand company directors who misuse company dissolution, especially to escape COVID-19 loans. Keith Tully explains the role of accountants in eliminating rogue directors and stamping out ‘phoenixism’.
Price and service transparency
It is one year since the Probate Regulations were updated to mandate price and service transparency. Our quality assurance reviewers are still finding firms are not fully complying with the updated regulations. Please review the requirements and make changes to ensure your firm is compliant.
Check what information you should be publishing and access the current regulations
OFSI issue general licence to permit the payment of legal fees to designated persons
As a result of the increasing number of new designations under the Russia and Belarus regimes, and the correlating increase in the number of those seeking a licence from OFSI for the payment of legal fees, OFSI has issued a general licence to permit the payment of legal fees owed by individuals and entities designated under either of these regimes. The licence was issued on 28 October 2022.
2023 probate diversity survey
The next mandatory probate diversity survey will take place in spring 2023. Look out for more information in your inbox.
Does your firm automatically sanction screen clients?
The pace of change and the volume of sanctions imposed in 2022 has increased the risk of ICAEW supervised firms inadvertently enabling sanctions evasion. As part of our work as an anti-money laundering supervisor, we recognised the need to perform monitoring activity to identify and mitigate the risks. The results of the ICAEW Sanctions Thematic Review 2022 indicate firms have increased the intensity and frequency of their existing sanctions screening procedures. Use this review to benchmark your firm’s policies and procedures for screening clients, to assess the level of risk to which your firm may be exposed and to mitigate these risks by implementing the policies and procedures outlined in this review.
Changes to Money Laundering Regulations
UK's ban of the provision of accountancy services to Russia
What the Register of Overseas Entities means for accountants
Part of the recently introduced Companies House reforms, the new Register is integral to the UK government’s response to the Russian invasion of Ukraine.
Putting AML in perspective
Hear from Seymour Taylor, one of the longest established accountancy practices in High Wycombe and the Thames Valley who used All Too Familiar to 'improve people's perception of how important anti-money laundering requirements are'.
Training film wins awards for ICAEW and HMRC
An anti-money laundering educational drama film, All Too Familiar, produced by ICAEW in collaboration with HMRC, has won three awards at the 2022 Association Excellence Awards.
Enhanced ICAEW membership
From January 2023, all ICAEW members will have access to additional content from the faculties and communities as part of their ICAEW membership. ICAEW licensed insolvency practitioners will continue to have access to all the resources from the Restructuring and Insolvency Community and ICAEW affiliates will continue to receive access to all the same resources as currently.
Quality Assurance monitoring feedback results
Find out what our firms thought of the monitoring review process in Q3 2022.
Our role as an anti-money laundering (AML) supervisor
226 AML monitoring reviews were carried out with ICAEW AML supervised firms in Q3 2022. 38.5% were at high or high-medium risk of being used to enable money laundering.