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 two fixed penalties.
In the first disciplinary tribunal, three separate cases against the same former member were considered, and the tribunal decided that the former member should be subject to individual sanctions of:
- a severe reprimand and fine of £7,500;
- an exclusion order and fine of £5,000; and
- a severe reprimand and fine of £5,000.
The tribunal then considered the position as a whole and issued a global sanction of exclusion from membership and fine of £17,500 and ordered the member to pay substantial costs.
The three cases related to multiple compliance failures when acting as a liquidator, failure to respond to correspondence and a formal complaint when acting as a trustee in bankruptcy, and finally failure to respond to a request for information, explanations and documents requested by letters issued in accordance with Disciplinary Bye-law 13.
In the second disciplinary tribunal published this month, a member was severely reprimanded, fined £5,000 and subject to a remedial order to provide information, explanations, and documents within 28 days, in respect of two cases of failing to provide the information, explanations and documents requested by letters issued in accordance with Disciplinary Bye-law 13.1, contrary to Disciplinary Byelaw 13.2. They were also ordered to pay costs.
In the third tribunal of this edition, a member failed to:
- respond to the Practice Assurance closing record following a Quality Assurance Department (QAD) visit, within 15 days, contrary to Practice Assurance Regulation 20 (effective 1 July 2019);
- fulfil two assurances given to ICAEW staff following the visit by the QAD relating to registration with the information commissioner’s office for data protection and issuing clients with details of the firm’s fees and complaints procedures, as required by the Code of Ethics (240.2b [2011]) and ICAEW Bye-law 11.1. Contrary to Practice Assurance Regulation 4 (effective from 1 January 2008) and Practice Assurance Regulation 8 (effective from 1 July 2019);
- failed to respond to the Practice Assurance closing record following QAD’s subsequent review, within 15 days, contrary to Practice Assurance Regulation 20 (effective 1 July 2019); and
- submit the 2020 and 2021 ICAEW annual returns for their firm in breach of:
a. Practice Assurance Regulation 12; and/or
b. Regulation 2.5 of the Professional Indemnity Insurance (PII) Regulations.
As a result, this member was excluded from membership and ordered to pay costs.
Consent orders made by the Investigation Committee and published this month were that:
A firm was severely reprimanded and fined £13,570 because it had signed an audit report in relation to a limited company for two year-ends, which stated that the firm had fulfilled its ethical responsibilities in accordance with the Ethical Standard issued by the Financial Reporting Council (FRC) when it did not in that:
- it accepted the audit engagement when an employee of its network firm was appointed as a director of the audited entity contrary to paragraph 2 of the Revised Ethical Standard issued by the FRC; and/or
- it continued the audit engagement when an employee of its network firm was appointed as a director of the audited entity. This is contrary to paragraph 2 of the Revised Ethical Standard issued by the FRC; and/or
- it issued a qualified audit opinion in relation to the accounts which stated that the audit was conducted in accordance with International Standards on Auditing (ISAs) when it did not in that the audit report did not comply with both ISA 705, Modification to the Opinion in the Independent Auditor’s Report and ISA 570, Going Concern.
A member was severely reprimanded and fined £6,000 for failing to submit their continuing professional development (CPD) records for the year ended 30 November 2019, contrary to Principal Bye-law 56c (effective from 14 October 2019).
Another member was severely reprimanded and fined £6,000 as a result of failing to respond to 25 separate items of correspondence from a client over a 17-month period.
A member was severely reprimanded and fined £2,800 because they signed an unqualified Solicitors Regulation Authority (SRA) Accountant’s Report which stated that they had carried out work to assess whether the firm had complied with the SRA Accounts Rules and the SRA Accounts Rules 2011 in the report period and they had not found significant breaches of the Accounts Rules and/or the SRA Accounts Rules 2011, when they:
a. failed to perform sufficient and appropriate work to identify that the company had failed to comply with the SRA Accounts Rules; and
b. failed to report such breaches to the SRA.
A student was severely reprimanded after they had shared with their 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 contrary to R115.1 of ICAEW’s Code of Ethics (effective from 1 January 2020).
Another member was severely reprimanded because they had prepared multiple years’ financial statements for 10 different clients, on behalf of the directors of those companies, which stated that the company was entitled to exemption from audit under section 477 of the Companies Act 2006, when this was not the case as the company was a subsidiary undertaking and did not meet the exemptions set out in section 479 of the Companies Act 2006.
A member was reprimanded and fined £1,500 for:
- failing to notify the Members’ Registrar and ICAEW of the formation of their practices, contrary to members and practice assurance regulations;
- engaging in public practice without a practising certificate contrary to Principal Bye-law 51a;
- engaging in public practice without PII contrary to Regulation 3.1 of the PII Regulations; and
- failing to ensure their two different firms were 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 (effective from 26 June 2017).
A firm was reprimanded and fined £1,400 because they had issued a reasonable assurance report on the Client Assets Sourcebook (CASS) audit for a client company, which stated that the procedures were carried out in accordance with the Client Assets Assurance Standard issued by the FRC when it did not, in relation to the following:
a. did not evaluate the firm’s compliance with CASS rule 7.16.16; and/or
b. failed to identify and report a breach of CASS rule 7.18.2.
A member was reprimanded and fined £700 because they had failed to notify the Members’ Registrar of ICAEW about the formation of their practice as required by the following regulations:
a. within 20 business days as required by Practice Assurance Regulation 9 (effective 1 January 2008 until 30 June 2019);
b. within 10 business days as required by Practice Assurance Regulation 13 (effective from 1 July 2019); and/or
c. within 28 days as required by the Information to be supplied by Members Regulation 3 (effective from 1 December 2010).
A student was reprimanded because they shared with their colleague by email, their answers to the mandatory ‘‘UK GAAP’’ internal e-training when they knew, or should have known, they should not do so contrary to R115.1 of ICAEW’s Code of Ethics (effective from 1 January 2020).
All of the above consent orders included a requirement to pay costs.
Two fixed penalty notices were published since the last update and they were for two separate cases of engaging in practice for 10 months without a practising certificate.
Further details can be found on our Disciplinary Database or please visit our Public Hearings page.