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Disciplinary update: April 2024

Author: Professional Standards

Published: 04 Apr 2024

Take note of the latest disciplinary cases to ensure you or your firm are not making similar mistakes.

Since the last update, one settlement order, five consent orders from the conduct committee and three fixed penalties have been published.

In the tribunal case that was settled, an insolvency practitioner was severely reprimanded, fined £20,000 and required to pay agreed costs under the terms of the settlement where they accepted that they had, in two liquidation appointments, drawn excessive and unreasonable fees. The IP agreed and undertook to apply to restore both liquidated companies to the Companies Register within 45 days of the date of service of the settlement Order and to return part of the fees to the unsecured creditors of each company within 45 days of the company successfully being restored to the Companies Register, or within 45 days of the date of service of the settlement Order, whichever is the later.

In the case determined by tribunal, five complaints were found proved and it was ordered that the member be excluded from membership and pay significant cost. One of those five complaints related to the failure to comply with an earlier Order of a previous disciplinary committee to provide a full response to the Conduct Department and that resulted in the issue of a severe reprimand.

In the other complaints the member had:

  • breached section 110.1 of the Code of Ethics (effective 2011 – 2019) in that, when dealing with a company client, they did not deal fairly with both shareholders and directors in a number of ways, despite being aware of a dispute;
  • failed to comply with regulation 3 of the Clients’ Money Regulations (effective 1 January 2011 – 31 December 2016) as they allowed their firm’s client money bank account to be used to receive money and to make payments which were not client’s money;
  • prepared and approved financial statements for the client company as director when they knew they were incorrect because the accounts prepared and filed at Companies House were for a dormant company when the company had undertaken transactions in the accounting period; and/or the accounts did not reflect the transactions undertaken by the company during the accounting period; and
  • was responsible for the preparation of the financial statements for another company client including an accountant’s report when they did not comply with the Financial Reporting Standard for Smaller Entities (effective January 2015) “FRSSE” for multiple reasons.

The consent orders issued by the Conduct Committee were that:

A firm be severely reprimanded and fined £4,700 because it failed to comply with regulation 7 of The Money Laundering Regulations 2007 in that they failed to apply customer due diligence measures in respect of their corporate client and/or failed to comply with regulation 27 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 in that they failed to apply customer due diligence measures in respect of that client.

Another Conduct Committee order was that a member be severely reprimanded and fined £3,570 because they:

  • failed to notify the Members’ Registrar of ICAEW of the formation of their practice;
  • failed to ensure that their practice was supervised by an appropriate anti-money laundering supervisory authority; and
  • engaged in public practice through their firm without professional indemnity insurance.

Another member was severely reprimanded and fined £1,750 , because whilst an employee they sent any or all of a number of specified emails to their personal email address from their work email address when they were not authorised to do so, and which contained confidential client information and/or data that was the property of their employer.

A firm was reprimanded because it had performed a Client Assets Sourcebook (CASS) audit for a corporate client and signed a reasonable assurance report which stated that the firm carried out procedures in accordance with the Client Asset Assurance Standard issued by the Financial Reporting Council when it did not, in that:

  1. the firm did not evaluate whether internal controls activities were put into place to cover all client assets and whether they were designed effectively, contrary to paragraph 94 of the Client Asset Assurance Standard issued by the Financial Reporting Council; and/or
  2. the firm failed to evaluate the firm’s compliance with CASS 6.6.14 R and/or CASS 6.6.17 R and/or CASS 6.6.24 R, contrary to paragraph 114 of the Client Asset Assurance Standard issued by the Financial Reporting Council.

A member was reprimanded and fined £700 because they prepared unaudited accounts for a charity client and undertook an Independent Examination for that client for four years when the charity was not entitled to claim exemption from audit under the Charities Act 2011 Section 144.

All the above consent orders also included a requirement to pay costs.

Lastly there were three fixed penalty orders published. Two related to convictions of two members for driving motor vehicles 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 and the third was a member who engaged in public practice for eight months without holding a practising certificate contrary to Principal Bye-law 51a.

Further details can be found on our Disciplinary Database or please visit our Public Hearings page.

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