Fit and proper declaration

This helpsheet has been issued by ICAEW’s Technical Advisory Service to provide ICAEW members a pro forma annual fit and proper, independence and confidentiality declaration form ready for copying and completion by principals and personnel.

Members may also wish to refer to the following guidance:

• ICAEW Code of Ethics
• FRC Ethical Standard

The ethical stance adopted by chartered accountants is fundamental to the qualification. Section 110 of the ICAEW Code of Ethics sets out the five fundamental principles of:

• Integrity;
• Objectivity;
• Professional competence and due care;
• Confidentiality; and
• Professional behaviour.

Where a firm act as auditors, in addition to the ICAEW Code of Ethics, auditors must comply with the FRC Ethical Standard.

In addition to codes of ethical behaviour there are other sources of regulation that preclude a firm from providing certain services where a relationship exists that could affect a firm’s independence or objectivity including the Companies Act 2006, the Co-operative and Community Benefit Societies Act 2014, the Friendly Societies Act 1974 and the Solicitors Accounts Rules, for example.

Who needs to complete a declaration?

The following form has been designed as a declaration for completion by both principals and members of staff. Principals and staff involved in work that requires Registered Auditor status should complete such a declaration annually, but best practice may be to require all personnel to comply.

It is the firm’s responsibility to ensure that the approval of beneficial owners, officers and managers (BOOMs) remains valid in accordance with regulation 26 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. ICAEW recommends that all firms ask BOOMs to complete a declaration annually to support the firm’s own declaration to ICAEW that there are no BOOMs with a criminal conviction.

Dealing with the responses received

Some of the statements within the declaration are fundamental and identification of an issue, for example certain fit and proper situations and confidentiality breaches, may represent issues that constitute gross misconduct and result in dismissal and/or legal action. To protect itself, a firm should normally bring such matters to the attention of personnel in a contract of employment but, given the complexity of this area, it is strongly recommended that legal advice is taken before introducing change.

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Ethics Advisory Service on +44 (0)1908 248 250 or via webchat.

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