A member firm was prohibited from using the description ’Chartered Accountants’ for a period of five years and ordered to pay significant costs. It failed to comply with the ICAEW Code of Ethics (effective 2011 – 2019) and its responsibility under paragraph 1.8 for ensuring that its employees comply with the Code in that in the preparation and filing of accounts on behalf of a client it allowed:

1. an employee of the firm, to file accounts with Companies House for a client that they knew were not final and this was done ‘to avoid the late filing penalty’, contrary to paragraph 150.1 of the Code (effective 2011 – 2019); and
2. an employee of the firm, to prepare and/or submit accounts for three years which were incorrect and were contrary to paragraph 130.1 of the Code (effective 2011 – 2019) because:
   1. the income was not complete; and/or
   2. the expenses were not complete; and/or
   3. the advances of monies to a director were not included in the accounts.

The firm also allowed its name to be associated with the accounts submitted to Companies House for the client, which were materially false and/or misleading.

In another tribunal case a provisional member was declared unfit to be a member as a result of submitting two expense claims to their employer for stays in hotels which they had not stayed in, and they knowingly retained the payment received from their employer. They also submitted a duplicate expense claim and again knowingly retained the payment from the employer. They were required to contribute to costs.

In a further tribunal case, a provisional member admitted to posting reviews on a website using job roles they had not had to obtain monetary vouchers. The tribunal ordered that for a period of six months, they are ineligible to sit any ICAEW examinations. There was no separate financial penalty, but a cost order was made.

A tribunal ordered a member be ineligible to apply for a practising certificate for 12 months and pay costs because they had failed to act for their client with professional competence and due care as required by section 130.1 (until 31 December 2019) and R113.1 (from 1 January 2020) of the ICAEW Code of Ethics. The member failed to

• submit the RTI returns for payroll to HMRC for various periodcontact HMRC to resolve a late reclaim of Statutory Maternity Pay submitted to HMRC
• issue the P60’s to the employees and/or their client 
• identify and/or advise their client to register for VAT when they went over the VAT threshold
• respond to a HMRC VAT compliance check letter sent to their client

In another case a member’s practising certificate was withdrawn and he was required to pay costs because they had:

• failed to provide handover information requested in respect of their former client;
• failed to provide their client with details of the principal to be contacted in the event of a complaint as required by Disciplinary Bye-law 11.1; and/or their right to complain to ICAEW as required by Disciplinary Bye-law 11.1; and/or details of the basis on which the firms’ fees would be calculated as required by section 240.2b ICAEW Code of Ethics (effective from 1 January 2011 until 31 December 2019) and R330.5 of ICAEW Code of Ethics (effective from 1 January 2020);
• failed to notify HMRC that no Construction Industry Scheme return was due on behalf of their client or to file a Construction Industry Scheme return for their client
• failed to file accounts and/or Corporation Tax Returns for their client by the filing deadline; and
• filed accounts with Companies House for their client that had not been approved by a director and that did not agree to the underlying records.

A provisional member was severely reprimanded and required to pay costs following a conviction for the indictable offence of committing an act/series of acts with intent to pervert the course of public justice contrary to common law.

In another conviction case a member was reprimanded and required to pay costs following their conviction for failing to provide information about a donation/donor to party, contrary to section 54(5) and (7) of Schedule 20 to the Political Parties, Elections and Referendums Act 2000.

Finally, a member was severely reprimanded, fined £5,000 and required to pay costs because they had failed to provide information, explanations and documents requested in a letter issued under Disciplinary Bye-law 13. They were also ordered to provide the information.

Consent orders issued by the Conduct Committee

A member was severely reprimanded and fined £13,000. They had, on behalf of his former firm signed an unmodified audit opinion on the financial statements of a limited company client which stated that the audit had been conducted in accordance with International Standards on Auditing (UK and Ireland), when they failed to prepare documentation that provided a sufficient and appropriate record of the basis for the audit procedures performed and conclusions reached with regards to stock, in breach of International Standard on Auditing (UK and Ireland) 230 ‘Audit documentation’.

They also signed an unmodified audit opinion on the same client’s financial statements for the following year which stated that the audit had been conducted in accordance with International Standards on Auditing (UK), when:

1. the auditor did not obtain reasonable assurance about whether the financial statements as a whole were free from material misstatement, in breach of International Standards on Auditing (UK) 200 ‘Overall objectives of the independent auditor and the conduct of an audit in accordance with International Standards on Auditing (UK)’;
2. the auditor did not plan the audit so that it would be performed in an effective manner, in breach of International Standard on Auditing (UK) 300 ’Planning an audit of financial statements’;
3. the auditor did not prepare documentation that provided sufficient and appropriate record of the basis for the auditor’s report, in breach of International Standards on Auditing (UK) 230 ‘Audit documentation’; and/or
4. the auditor did not obtain sufficient appropriate audit evidence that funds were due in breach of International Standard on Auditing (UK) 500 ‘Audit evidence’.

A firm was severely reprimanded and fined £8,000 because it had issued a reasonable assurance opinion on a Client Assets Sourcebook (CASS) audit for a limited company 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, in that:

1. the breaches schedule appended to the reasonable assurance report did not include breaches identified by the Financial Conduct Authority in its letter to the client in breach of paragraph 118 of the Client Asset Assurance Standard;
2. it failed to report that the client breached CASS rules 7.15.7 and 7.15.15, as it did not
   maintain records of its internal client money reconciliations contrary to paragraph 118 of the Client Asset Assurance Standard; and/or
3. it did not
   1. evaluate the clients’ compliance with CASS rules 7.16.10, 7.16.16 and / or 7.16.17 in relation to Internal Client Money Reconciliations, contrary to paragraph 114 of the Client Asset Assurance Standard; and/or
   2. prepare sufficient appropriate documentation on the clients compliance with these CASS rules, contrary to paragraph 44 of the Client Asset Assurance Standard.

A member was severely reprimanded and fined £7,500 because they had:

• on behalf of their firm, failed to comply with Clients’ Money Regulation 21 (effective from 1 January 2011 to 31 December 2016 and / or from 1 January 2017) as the firm, on 25 occasions:
  
  1. failed to ensure that the sum of the credit balance held for all clients was at least equal to the total balance held in all client bank accounts; and/or
  2. withdrew amounts from client bank accounts that were greater than the credit balance held for that client.
• provided a loan to a client of £3,000 and failed to evaluate the threat arising from the provision of a loan to a client and whether this could be managed with safeguards, which was contrary to ICAEW’s Code of Ethics section 100.8 (Conceptual Framework) (effective between 1 January 2011 and 31 December 2019); and / or ICAEW’s Code of Ethics section R120.7 (Evaluating threats) (effective from 1 January2020).
• failed to treat funds in accordance with the Clients’ Money Regulations:
  
  1. money held on behalf of a client was not held in a designated client money bank account as required by Clients’ Money Regulation 13;
  2. they failed to ensure that the firm, withdrew monies payable to the firm from the clients’ money bank accounts, held on behalf of the client  as soon as reasonably practicable in accordance with Regulation 23 of the Clients’ Money Regulations; and / or
  3. failed to comply with Regulation 22 of the Clients’ Money Regulations (effective from 1 January 2017) as they caused or permitted money to be withdrawn from the client bank account, to cover a loan they had personally made to a client, without obtaining client agreement.
• withdrew funds from the client bank account without authorisation from a client and/or without complying with the other requirements of Clients’ Money Regulation 20 (effective from 1 January 2017).

Another member was severely reprimanded and fined £5,250 because they sent five separate e mails to a former client that were found to be unprofessional and therefore contrary to R115 (Professional Behaviour) of ICAEW’s Code of Ethics (effective from 1 January 2020).

An insolvency practitioner was severely reprimanded and fined £2,500 because in their capacity as the proposed and subsequently appointed lead joint administrator of the company they breached the fundamental principle of Professional Competence and Due Care as set out in the Insolvency Code of Ethics (applicable from 1 May 2020) by failing to comply with the requirements of Statement of Insolvency Practice 16 (SIP16) as follows:

1. they failed to adequately explain to creditors why the joint administrators’ proposals were not issued to creditors with the SIP16 statement;
2. they failed to disclose whether any requests were made to potential funders to fund working capital;
3. they failed to provide details of charges registered against the company;
4. they failed to adequately explain to creditors how long pre-administration marketing activities lasted and why the joint administrators deemed the marketing to have been adequate;
5. they failed to explain how the goodwill valuation was calculated and incorrectly reporting that valuation to creditors;
6. they failed to clearly explain to creditors how the sale proceeds had been apportioned; and
7. they failed to disclose the identity of a former director of the company who was involved with the purchaser.

A provisional member was severely reprimanded because they submitted their Level 7 project report for assessment which incorporated unpublished work created by another person without appropriate acknowledgement, when they knew or should have known that they should not do so. This was in breach of the Guidance contained within Regulation 18 of the Level 7 Accountancy Professional Apprenticeship Certificate Regulations (effective 15 March 2018).

Another provisional member was severely reprimanded because they shared with and/or requested from colleagues by email, answers to five of their firms mandatory internal e-training assessments related to audit updates, UK Company Law and UK GAAP when they knew, or should have known,they should not do so. This conduct was contrary to subsection 115.1 of the ICAEW Code of Ethics – Professional Behaviour (effective from 1 January 2020).

A member was reprimanded and fined £2,250 for failing to notify ICAEW’s member’s registrar of their practices and also failing to ensure that their firm was supervised by an appropriate anti-money laundering supervisory authority.

Another member was reprimanded and fined £700 for also for failing to notify ICAEW’s member’s registrar of their practice and also failing to ensure that their firm was supervised by an appropriate anti-money laundering supervisory authority.

Two members were both reprimanded and fined £1,995 because they had:

• engaged in public practice for over two years without holding a practising certificate contrary to Principal Bye-law 51a
• failed 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)
• failed 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 (effective from 26 June 2017)
• engaged in public practice through without professional indemnity insurance contrary to Regulation 3.1 of the Professional Indemnity Insurance Regulations.

Another member was reprimanded and fined £1,050 for compliance issues in that they:

• failed to ensure two 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;
• failed to notify the members’ registrar of ICAEW that they were providing accountancy services as required by the following regulations:
  1. within 10 business days as required by Practice Assurance Regulation 13 (effective from 1 July 2019); and / or
  2. within 28 days as required by the Information to be supplied by members regulation 3 (effective from 1 December 2010).

• failed to comply with the Professional Indemnity Insurance Regulations in that they permitted or caused their firm to engage in public practice without professional indemnity insurance, contrary to Regulation 3.1 of the Professional Indemnity Insurance Regulations;
• failed to comply with Practice Assurance Regulation 13 (effective 1 July 2019), in that as the holder of a Practising Certificate they did not notify ICAEW that he was providing accountancy services;
• failed to notify to ICAEW that their firm had appointed two new directors, within 10 business days; and
• caused or permitted there firm to use the description Chartered Accountants when not eligible to do so as it was not a member firm, in breach of Regulation 5 of the Regulations Governing the Use of the Description Chartered Accountants and ICAEW General Affiliates (effective from 19 June 2017).

A member who carried out probate activities (a reserved legal activity), on the estate of two separate clients without a licence from an approved regulator or licensing authority, contrary to section 13 of the Legal Services Act 2007 was reprimanded.

All the above consent orders also included a requirement to pay costs.

Fixed penalties

Seven fixed penalties were published, of which five 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 other two fixed penalties related to a case of engaging in public practice without holding an ICAEW practising certificate contrary to Principal Bye-law 51a and a case of engaging in public practice without Professional Indemnity Insurance contrary to Regulation 3.1 of the Professional Indemnity Insurance (PII) Regulations (effective 29 May 2020).

Further details can be found on our Disciplinary Database or please visit our Public Hearings page.