The Practice Assurance Committee is asking firms to take a close look at three recurring issues it is currently seeing: communication of fees and complaints procedures, accurate and timely completion of annual returns, and cooperation with monitoring visits. Firms are encouraged to check their processes now, as failing to meet these requirements can result in regulatory action.
Fees and complaints procedures
What are the rules?
The ICAEW Code of Ethics (R330.4 – R330.5) requires firms to communicate their basis of fees to clients in writing. Separately, ICAEW’s Investigation and Disciplinary Regulations (regulation 8.1) require firms to notify all clients in writing of:
- the name of the person they should contact to make a complaint;
- and their right to complain to ICAEW.
While many firms provide this information in an engagement letter, other written formats may also be suitable.
What are the common issues?
We continue to see cases where this information has not been provided or has not been documented clearly. Reviewing your client onboarding process can help ensure these requirements are consistently met for both new and existing clients.
Our advice:
- Ensure all clients receive written information about the basis of fees and complaints procedures.
- Review the regulations and engagement letters and terms of business now to ensure they remain up to date.
- Make sure complaints information is provided before work begins.
Annual returns: accuracy and timings
What are the rules?
Firms must submit an accurate and complete annual return to ICAEW by the specified deadline (see Practice Assurance regulation 12 and regulation 2.5 of the Professional Indemnity Insurance (PII) Regulations). The return helps us monitor firms, understand their activities, identify potential regulatory risks and to confirm compliance with the PII Regulations.
Firms must separately notify us of changes to their practice within 10 working days, rather than waiting until their next annual return.
What are the common issues?
We have identified recurring issues with annual returns, including inaccurate or incomplete information and late submissions. Firms should check that pre-populated information is still accurate and reflects the current circumstances and ensure any changes to their structure or other details are reported promptly.
Our advice:
- Review standing data before submission.
- Ensure all responses are complete and accurately reflect your firm's current position.
- Submit your annual return by the specified deadline.
- Notify us promptly of changes to your firm's structure or details. Don’t wait for your annual return as issues may then arise during a monitoring review.
Case study
A firm gave an assurance during a monitoring visit that it would complete its annual returns accurately in future. At a subsequent visit, a quality assurance reviewer identified that the firm had again failed to complete its annual return accurately. The firm was offered a Practice Assurance penalty of £2,550 for failing to comply with two assurances given to ICAEW, one of which related to the accurate completion of annual returns.
Practice Assurance monitoring visits
What are the rules?
Firms are required to co-operate with our Practice Assurance monitoring process, including responding to requests for information and facilitating monitoring reviews. This involves engaging with quality assurance reviewers, providing requested documentation and making relevant staff available during the visit.
What are the common issues?
We see cases where firms are slow to respond to communications, arrange review dates or provide requested information, for example in response to closing record findings. Delays can prolong the monitoring process and create unnecessary administrative burdens for both firms and ICAEW. This lack of cooperation can also result in a referral to the Conduct Department to consider disciplinary action.
Our advice:
- Respond promptly to communications about proposed review dates.
- Provide requested information by the specified deadlines.
- Ensure key principals and staff are available for the review.
- Have requested documentation ready before the visit.
Practice Assurance Committee outcomes
Five cases have been considered by the committee so far this year that relate to firms not cooperating fully with arranging a monitoring visit. In four cases the firm agreed to the visit, or established contact with us, once the matter was reported to the committee. One case, where the committee did not receive a response, has been referred to the Conduct Department.
A final check
Clear documentation, accurate information and timely responses remain some of the simplest and most effective ways to demonstrate compliance and support a smooth regulatory relationship.