Since the last update, the outcome of two tribunal committees and three consent orders by the Conduct Committee have been published. Two Fixed Penalty Consent Orders have been issued.

A tribunal committee found four complaints proven against a firm on its own admission. The complaints were that the firm had:

1. Not complied with Clients' Money Regulation 8A. As it had provided banking facilities through its clients' money accounts by processing transactions that did not relate to accountancy services being provided by the firm to 11 clients on dates between 2015 and 2023.
2. Not complied with Clients' Money Regulation 13 as they had held money in excess of £10,000 for four clients on six occasions on dates between 2019 and 2021.
3. Not complied with Clients' Money Regulation 20A as they had retained client monies for four clients that were not required for accountancy related transactions on dates between 2018 and 2021.
4. Not complied with Clients' Money Regulation 14 as they had failed to ensure that interest earned on a designated client account was credited to the client.

The firm received a severe reprimand, a fine of £8,400, was required to pay costs and received an ancillary order that the firm should submit external client money compliance reviews to ICAEW for the next three years.

Another tribunal resulted in a provisional member being found unfit to be a member and required to pay costs as they had been convicted for one count of murder and one count of manslaughter.

Consent orders were made and published by the Conduct Committee in the following cases:

A firm was severely reprimanded and fined £113,000 because it had:

1. issued six audit reports when they had failed to obtain sufficient evidence to draw reasonable conclusions in respect of the applicable accounting treatment for revenue derived from the sale of freehold/leasehold property to third party investors as required by ISA 500 'Audit Evidence'.
2. issued five audit reports when they had failed to obtain sufficient evidence to draw reasonable conclusions in respect of the applicable accounting treatment for revenue derived from the sale of freehold/leasehold property to third party investors as required by ISA 500 (UK) 'Audit Evidence'.
3. issued 24 audit reports when they had failed to obtain sufficient and appropriate audit evidence in respect of the going concern assumption as required by ISA 570 'Going Concern'.
4. issued 29 audit reports when they had failed to obtain sufficient and appropriate audit evidence in respect of the going concern assumption as required by ISA 570 (UK) 'Going Concern'.
5. issued an audit report when a material misstatement was not identified in relation to the group statement of changes in equity and the group balance sheet.

A member was reprimanded and fined £770 for the following compliance failures over a period of nine months:

• failing to notify the Members' Registrar of ICAEW that they had engaged in public practice within 28 days as required by the Information to be supplied by members regulation 3 (effective from 1 December 2010); and
• failing to ensure their firm was 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. 

A firm was reprimanded and fined £5,600 because of a finding that it had issued a qualified opinion on a Client Assets Sourcebook (CASS) audit which stated that they carried out procedures in accordance with the Client Asset Assurance Standard issued by the Financial Reporting Council when it did not as it did not evaluate the client’s compliance with the following CASS rules:

• the client did not have a client transaction account acknowledgement letter with one of its sub custodians, contrary to CASS 7.18.3 R; and/or
• the client had one client bank account acknowledgement letter which was not compliant with CASS 7.18.2 R; and/or
• the client did not record the actions it took to resolve discrepancies that it identified in the physical asset reconciliation, contrary to CASS 6.6.8 R;

and as a result had failed to comply with paragraph 114 of the Client Asset Assurance Standard.

In the alternative, the firm had issued a qualified opinion on the CASS audit for a client 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 because:

• it did not evaluate the client's compliance with CASS rule 7.15.12, contrary to paragraph 114 of the Client Asset Assurance Standard; and / or
• prepare sufficient appropriate documentation on the client's compliance with CASS rule 7.15.12, contrary to paragraph 44 of the Client Asset Assurance Standard.
• when two breaches were identified in relation to CASS 6.3.4A R and CASS 6.6.54R, but were not reported in its assurance report.

And as a result the firm had failed to comply with paragraph 118 of the Client Asset Assurance Standard issued by the Financial Reporting Council.

Fixed penalties

Two fixed penalties were published. One related to driving a motor vehicle in a public place 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.

The second fixed penalty related to engaging in public practice without Professional Indemnity Insurance contrary to Regulation 3.1 of the Professional Indemnity Insurance (PII) Regulations (effective 29 May 2020).