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In this issue, read clarification on reporting to the Civil Aviation Authority (CAA) on escrow accounts. We’ve also included important reminders from the CAA and of some key resources available to you to help you comply with ATOL Reporting Accountant (ARA) requirements.

ATOL reforms

In January 2023, the CAA issued its consultation document “assessing the impacts of the options for reform – request for further information”. This document provided an update on the progress to date of the ATOL reform programme, on amendments to the scope of the programme as requested by the Government via the Trustees of the Air Travel Trust, and on the timetable. This document also explained the CAA’s overall approach to appraising the options for reform. The consultation closed in March.

PII requirements for ARAs

ARAs are required to have professional indemnity insurance (PII) cover in excess of the liability cap. The liability cap is calculated based on the ATOL holder’s licensable revenue limit or bond. By reporting, the ARA confirms that their PII cover is at least to the value of the liability cap, with a minimum of £250k. You should ensure these requirements are fully met.

CAA guidance on AAR

The CAA relies on the reporting that ARAs do, and it wishes to remind ARAs of a few important matters.

  • If amendments are required to the Annual Accountants Report (AAR) Part 1 for example, where the revenue and passenger numbers relating to the ATOL Holder APC return are incorrect, then the ARA must decline the AAR Part 1. This allows for a complete trail of the reporting, from the incorrect report to the subsequent approved reporting, by the ARA. So, to make amendments, ARAs must first decline the initial report.
  • The CAA has identified a number of errors being made in the initial AAR Part 2 report by the ATOL holder where the reported information does not agree to the financial statements/accounts. Where the figures do not agree, the ARA should decline an incorrect report, which would send the ATOL holder a message to correct it and resubmit. We would remind ARAs to ensure that the reported figures in Part 2 agree to the financial statements/accounts of the relevant Group as applicable.

CAA updates for training of APs and ARAs

The CAA updated the training for Accountable Persons (AP) and ARAs to reflect the changes to the ATOL Regulations in 2018 and is available now. You can find more information on the CAA’s website and some helpful FAQs which include guidance on how to access the training.

While the CAA has not mandated this training, we continue to strongly encourage ARAs to complete this to ensure they are aware of the key changes and continue to be aware of their roles and responsibilities. We remind firms that the ICAEW Licensed Practice Handbook (para 5.09) also requires a licensed practice to make arrangements so that all licensed practitioners, principals and employees doing licensed work are, and continue to be, competent to carry out the licensed work for which they are responsible or employed. This should include any updates issued by CAA to the CAA/ATOL training package. We will continue to review ATOL training during our monitoring visits.

Work procedures for ARAs

During our monitoring visits, we have identified some gaps in the work performed by ARAs as a result of not using all the relevant work procedures. We have therefore included here a reminder of what the requirements are, and how the CAA guidance and ICAEW Technical Release are linked.

The work procedures in Appendix A of the CAA’s Official Record Series 3 (ORS3) are set out in Annex 7. It includes paragraph (a) on reporting on Public Licensable Revenue. No agreed work procedures are provided here, and the ARA is guided to refer to their professional accountancy bodies for suggested work procedures for this aspect of reporting on Public Licensable Revenue.

ICAEW has issued such work procedures in Appendix 4 of our Technical Release: ATOL Reporting Accountants reporting to the CAA. We remind firms to ensure that they do not rely solely on the Work programme in the ORS3, but also perform appropriate procedures consistent with those in the Technical Release in respect of Public Licensable Revenue.

Licensed practice annual review requirements and checklists

As a reminder, a licensed practice needs to review, at least once a year, how effectively it is complying with the ICAEW Licensed Practice Handbook and take action to deal with any issues found (para 3.12). The review should cover:

  • the licensed practice’s ATOL whole firm procedures; and
  • a review of a selection of client files annually.

The licensed practice should use an independent reviewer, at least once every three years, to perform a review of a sample of client files (para 5.07).

We published a checklist to help you perform your ATOL whole firm compliance review.

We have also published a helpsheet providing a checklist suitable for performing cold file reviews of ATOL engagements which you may find useful when conducting an annual compliance review in accordance with the ICAEW Licensed Practice Handbook.

Updated ICAEW Licensed Practice Handbook

The Handbook was updated on 1 June 2023 due to changes to ICAEW’s disciplinary framework. The amendments are consequential changes only to align terminology. For example, some committee names have been updated and references to specific Disciplinary Bye-laws have changed.

ICAEW’s Travel, Tourism and Hospitality Community

You might be interested in becoming a member of our Travel, Tourism and Hospitality Community. It’s free and open to everyone, including non-ICAEW members.

ICAEW Licensed Practice homepage reminder

Visit our homepage for latest guidance and best practice, including news updates. We will update this page for all new developments.

Latest news from the Professional Standards Department

CPD is changing

The revised CPD Regulations will place specific responsibilities on ICAEW member firms/other firms from 1 November. Read about the new requirements and the key steps to take in the coming months and find guidance and details that are available on our dedicated web page for you.

Have your say: PII Regulations review

Help us ensure PII arrangements provide adequate protection to the public while being mindful of costs to the profession.

Changes to ICAEW's disciplinary process

On 1 June 2023, revisions to ICAEW's disciplinary framework came into effect. We break down what’s changed including updates to the disciplinary and appeals processes.

Regulation in times of change

ICAEW's regulatory and conduct responsibilities are delivered by the Professional Standards Department (PSD). Our role is to strengthen trust and protect the public by following the 3Es: Enable, Evaluate and Enforce. Read more about our strategy, activities, and the oversight of ICAEW's regulatory and conduct role in the Regulatory and Conduct Report 2022–2023.

Strength through diversity: building better committees

Kim Nyawira, Head of Committees and Tribunals at ICAEW, tells us about initiatives to broaden opportunity and diversity to the regulatory and disciplinary committees.


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