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Stepping up to the challenge

Author: Professional Standards Department

Published: 08 Apr 2024

ICAEW’s Professional Standards Department (PSD) has recently made three new senior management appointments. We ask Sophie Wales, Director of Regulatory Policy, Sarah Brook, Director of Investigations, and Nick Reynolds, Head of Audit, about their new roles, and their priorities for the future.
Sophie, Sarah and Nick all have backgrounds in accountancy practice and have held a range of posts within ICAEW. As they take up their latest roles, they bring with them an in-depth knowledge of the regulatory landscape and direct experience of the day-to-day challenges facing practitioners and firms.

Their areas of responsibility differ but, when they each talk about their priorities and the challenges ahead, their answers reveal some common threads. These include communication, education, accessibility, proportionality, the evolution of the regulatory environment, and the importance of protecting the public interest.

What’s your background?

Sophie: “I trained at a Big Four firm and worked there in tax for nearly a decade. I joined ICAEW in September 2014, starting in the Conduct Department as a case manager investigating tax cases and ethical issues. In 2018, I moved to the Reputation and Influence Department, eventually becoming Director of Trust and Ethics. Then, following maternity leave, I came back to PSD where I’ve been Head of Regulatory Affairs.”

Sarah: “I’m an ICAEW member myself. After university, I started a training contract at a top ten firm and stayed there for many years, leaving as a senior manager in the audit department. I then moved to ICAEW, first as a case manager and later as senior manager in the audit investigations team. After briefly returning to practice as a firm’s Director of Independence and Ethics, I came back to ICAEW to create and manage the Special Investigations Team. So I’ve led two teams that have worked with a wide range of complaints of various types, and I think this sets me up well to take on the new role.”

Nick: “I joined ICAEW in 2007 as a Quality Assurance Department (QAD) reviewer and was previously a senior audit manager at a Big Four firm. Since then, I've been involved across all of the different activities of QAD, not only in audit but also on the Practice Assurance and Designated Professional Body side. For the last eight to nine years, I've led one of the teams of QAD reviewers. In addition to my time with the Big Four firm, I had a year as a financial accountant in industry, so I've seen audit from all sides.”

What are your principal areas of responsibility?

Sophie: “I'll be leading PSD’s work overseeing the regulations and other requirements that ICAEW members and firms must comply with. But I’ll also be looking at new and emerging policy areas, representing ICAEW in discussions in these areas and working with all stakeholders to formulate appropriate policies.”

Sarah: “Upon the retirement of Nigel Howell, Head of Investigation, we took the opportunity to restructure the department. My role is one of three senior appointments in the Investigation Team within the Conduct Department as part of the recent restructure. I’m looking forward to working with the newly appointed Head of General, Compliance & Tax Investigations and the Head of Insolvency Investigations.

“This is the first time we’ve had a Director of Investigations. My role is quite varied and broad. In particular, we’re taking the restructure as an opportunity to think about how we might increase efficiencies and effectiveness of our conduct work.

“To this end, we’ve created a Conduct Department Management Committee, which I’m co-chairing with Emily Healy-Howell, who is Director, Regulatory and Conduct, within PSD. The committee will take on responsibility for the operations of the Conduct Department, and we’ll work closely with representatives from Investigation, Conduct, Legal, and Committees and Tribunals to better collaborate together, seeing the process all the way through from a complaint coming through the door to it reaching a committee, if necessary, of course.”

Nick: “As Head of Audit, I have overall responsibility for the Quality Assurance Department’s audit-related monitoring activities, principally statutory audit monitoring both in the corporate and public sector, as well as oversight of our third-party audit monitoring work.”

“The role will also involve overseeing continuing professional development (CPD) monitoring for all ICAEW members and firms, not just audit-registered firms, as this evolves under our new CPD framework.”

What are your priorities and goals?

Sophie: “For me, there are three main priorities, the first of which is the future of PSD as a regulator. In particular, a consultation is currently underway about the future regulation of the tax profession, which is something close to my heart because I’m a tax specialist by background.

“It’s going to be a priority for me to be leading those discussions from a PSD perspective, with HMRC and other stakeholders to seek a position that’s right for members, and also right for the whole tax services market, as well as in the public interest.

“With proposals around anti-money laundering supervision still being debated, as well as reforms to insolvency services regulation, the question of what the future looks like for PSD as a regulator across all these areas is crucial.

“My second priority is to ensure PSD has the information it needs to assess the areas of risk in the broader audit market, in particular looking at how we can better understand the movement of audit engagements of certain entities that are of particular interest to us.

“The third priority is to develop a better understanding of consumers and how to support their needs, especially in legal services provided by our firms. We've already been talking to firms about collecting consumer feedback, and I want to build on that by looking at where consumers may have gaps in their understanding of how they can use legal services to meet their needs, and how PSD can help to fill those gaps.”

Sarah: “One of my first priorities is getting the new Conduct Department Management Committee up and running and getting us all working together in that forum.

“I also want to raise my profile with members and firms. Something I’m very keen to do is make myself available if firms want to discuss anything to do with the work of the Conduct Department. I really welcome the opportunity to engage with firms, and to get out and talk to firms about what we’re seeing in terms of trends, and what they can do to try to avoid complaints.”

Nick: “I think the number one priority is embedding the International Standard on Quality Management 1 (ISQM1) in a suitably proportionate way across all sizes of firm. ISQM1 has not fundamentally changed the sorts of policies and procedures that firms are expected to have in place, but it brings a new way of thinking about quality, firms’ own monitoring, and of continuous improvement of their processes.”

What will be the main challenges you’ll face?

Sophie: “In terms of the future role of ICAEW as a regulator, the challenge is to ensure government and oversight bodies have a fuller and broader understanding of all the great work we do to raise standards, and what we bring as a regulator to all the areas we’re working in.

“As the regulatory landscape changes, we need to make sure that we work with government and other stakeholders to get to a regulatory framework and a policy position that is the right one for our members and those we regulate, while staying mindful of the importance of the public interest.”

Sarah: “There are always going to be challenges along the way, whether they arise from complex investigations, trying to improve our ways of working, or dealing with conflicts or difficult situations.

“But one of the biggest challenges for me personally is that I've got some really big boots to fill. Nigel was in his role as Head of Investigation for a long time and is very well respected. So that's going to be a challenge: stepping into that role and taking over from him. However, I like a challenge so I’m really looking forward to shaping the new role.”

Nick: “My new role is one I understand reasonably well from my previous work with Trevor Smith, the outgoing Director, QAD. I'm certainly not underestimating the challenges, that's for sure, and I’m fortunate to be able to draw on the considerable experience within our strong team in QAD and the wider Professional Standards Department.

“One of the biggest specific challenges over the next 12 months is likely to be oversight of compliance with the new CPD Regulations. As the monitoring work develops, I'm hoping we’ll be able to identify any common issues or misconceptions, and also share good practice, so everyone feels supported in their application of this change.

“For audit firms more specifically, the challenge comes back to the importance of focusing on ISQM1. While firms won’t necessarily always be getting everything right, what we want to see is that where something goes wrong, they can use root cause analysis to identify and fix the issues. That’s the underlying purpose of ISQM1 and we must all work together to make that a reality and maintain public confidence in the audit profession.”

What interests you most about your new role; what are you looking forward to?

Sophie: “I’m interested in raising standards and achieving the right outcomes, but in a way that is proportionate and doesn’t put undue pressure and cost on our members and firms.

“The work I’ve done on the revised ICAEW CPD framework in my former role has been something I've really enjoyed in terms of designing something that is hopefully balanced and clear, and that helps us to build trust in the profession.

“I'm already on the senior management team, but I'm looking forward to taking a step up, being a director and part of the wider leadership of PSD.”

Sarah: “What motivates me is knowing that we're doing a good job, upholding standards and making sure that everybody is satisfied in their role internally, and has a clear idea of what their role and purpose is.

“So, I’m looking forward to being on hand to guide people along the way. One of my immediate plans is to meet with everybody in the Investigation Team, at all levels, to have an informal chat and find out what they think works well and what they think we could do better. And I'm hoping that I can support people to feel they're properly equipped to do the job they do.

I’m also looking forward to being part of the senior management team and being involved in the future leadership of PSD.”

Nick: “It's always been the variety of work we do in ICAEW that has interested me. I've been here for over 16 years now and no day is ever the same. It's good to have engagement with a range of firms every year, and there's never a dull moment.

“I’m not sure there’ll be anything all that new in my new role, but I hope it will give me a chance to speak to a wider range of stakeholders about the things that are important in audit quality. I always look forward to having, sometimes robust but always useful, discussions with others, to better understand the pressures in the sector and how those can be mitigated.”