Since the last update, one settlement order, two tribunal orders and four consent orders from the Conduct Committee have been published.

In the matter that was settled, a member was severely reprimanded, fined £25,000 and ordered to pay costs in respect of the following complaints:

1. Accepting the appointment as Administrator of ‘A’ Limited in circumstances where they had failed to take reasonable steps to obtain appropriate knowledge and understanding of that Company and its assets, contrary to the Code of Ethics Part D effective from 1 January 2011 paragraphs 400.37 and 400.38.
2. In the period leading up to their appointment as Administrator of ‘A’ Limited, they failed to create any or sufficient written contemporaneous records setting out the steps which they had taken, and the conclusions reached, in identifying, evaluating, and/or responding to actual or potential threats to the Fundamental Principles, contrary to the Code of Ethics Part D effective from 1 January 2011 paragraphs 400.74 and 400.75.
3. As Administrator of ‘A’ Limited, the member sold the main assets of ‘A’ Limited to a connected company without a valuation or adequate marketing process, contrary to the Code of Ethics Part D effective from 1 January 2011 paragraph 400.4(c).
4. Following their appointment as Administrator and Liquidator of ‘B’ Limited, failed to:
   1. undertake adequate investigation of the entity, contrary to paragraph 400.37 of the Code of Ethics Part D (effective from January 2011); and/or
   2. secure the books and records of ‘B’ Limited, in breach of Statement of Insolvency Practice 2.

5. As Liquidator of ‘B’ Limited, failed to progress the Liquidation of ‘B’ Limited in a diligent manner contrary to paragraph 400.4 of the Code of Ethics Part D (effective January 2011).
6. As Administrator of ‘B’ Limited, sold the goodwill of ‘B’ Limited to a connected party without a valuation contrary to paragraph 400.4 of the Code of Ethics Part D (effective January 2011).
7. As Administrator of ‘B’ Limited, issued their Proposals and/or six-month and/or final progress reports to creditors which contained inaccurate and/or incomplete statements, and/or omitted information entirely, contrary to paragraph 400.36 of the Code of Ethics Part D (effective January 2011).
8. As Liquidator of ‘B’ Limited, issued annual reports to creditors which contained inaccurate and/or incomplete statements, contrary to paragraph 400.36 of the Code of Ethics Part D (effective January 2011) and/or Rule 4.49B of The Insolvency (Amendment) Rules 2010.
9. As Liquidator of ‘B’ Limited, failed to comply with Rule 4.49C of The Insolvency (Amendment) Rules 2010 read with Section 104A of the Insolvency Act 1986 in that they did not produce a progress report for the following year ends, within the period of two months:
   1. 24 June 2016; and/or
   2. 24 June 2017; and/or
   3. 24 June 2018; and/or
   4. 24 June 2019.

10. As Liquidator of ‘B’ Limited, failed to comply with Rule 4.49C of The Insolvency (Amendment) Rules 2010 read with Section 104A of the Insolvency Act 1986 in that they:
    1. Did not send a progress report for the following year ends within the period of two months following each anniversary, to the Registrar of Companies:
       1. 24 June 2016; and/or
       2. 24 June 2017; and/or
       3. 24 June 2018; and/or
       4. 24 June 2019.
    2. Did not send a progress report for the following year ends within the period of two months following each anniversary, to the members and creditors:
       5. 24 June 2016; and/or
       6. 24 June 2017; and/or
       7. 24 June 2018; and/or
       8. 24 June 2019.

In the first tribunal case, a provisional member was found to have acted dishonestly and without integrity in submitting timesheets to their employer when they had not undertaken all of the work shown on the timesheets. They had their provisional member status withdrawn and they were declared ineligible to re-register for a period of two years. They were also required to pay costs.

In the second tribunal case, a member was excluded, fined £10,000 and ordered to pay costs for: acting dishonestly in signing 24 audit reports on behalf of their firm, when the firm was not registered for appointment as auditor with ICAEW or any other Recognised Supervisory Body; acting without integrity by submitting, or causing to be submitted, to Companies House the same 24 audit reports which meant they were not being straightforward and honest towards Companies House as they were holding themselves out as a registered auditor when they knew they were not; and acting without integrity for failing to disclose in their firm’s ICAEW annual returns that their firm earned fees from audit work over a period of seven years.

The consent orders issued by the Conduct Committee resulted in orders that:

A firm was severely reprimanded and fined £130,000 in respect of five audit reports issued stating that the audits had been undertaken in accordance with International Standards on Auditing (UK) when the audit was not conducted in accordance with International Standard on Auditing (UK) 500 ‘Audit evidence’ in that the auditor failed to obtain sufficient appropriate audit evidence in respect of: stock held at the year-end (impacted two audit reports), goods received not invoiced accrual (impacted two audit reports), intercompany transactions (impacted one audit report), prior year restatement in relation to stock (impacted two audit reports), the accounting for investments in and/or acquisitions of ‘A’ Ltd and ‘B’ Ltd (impacted one audit report), and the accounting for the investments in ‘C’ Ltd (impacted two audit reports).

A member was severely reprimanded and fined £5,040 because they failed to restore a company to the Companies House Register despite agreeing to do so and accepting funds for this purpose. This was contrary to R113.1(b) (Professional Competence and Due Care) Code of Ethics (effective from 1 January 2020). The member also failed to substantively reply to a request for a receipt for the funds that had been paid and also failed to communicate the steps they were taking. This was contrary to R115.1 (Professional Behaviour) Code of Ethics (effective from 1 January 2020).

A member was reprimanded and fined £4,000 for preparing four years of their company’s accounts incorrectly. For two years of accounts, there was no disclosure of the reasons for choosing the period for depreciating goodwill; this was contrary to paragraph 6.13 of the Financial Reporting Standard for Smaller Entities (effective April 2008 and/or January 2015). For one year of accounts, accumulated amortisation was added back in the profit and loss account for the year; this was contrary to paragraph 19.23(a) and/or paragraph 10.16 of FRS 102. For the fourth year of accounts, accumulated amortisation was added back in the profit and loss account for the year and also no amortisation was charged for the year; this was contrary to paragraph 19.23(a) and/or paragraph 10.16 of FRS 102.

Another member was severely reprimanded and fined £8,750 in respect of complaints that they:

1. acted contrary to paragraph 400.53 and/or the Fundamental Principle of Professional Competence and Due Care as set out at paragraph 400.4(c) of the Code of Ethics (Part D) (effective to 30 April 2020), and/or paragraph 2320 and/or the Fundamental Principle of Professional Competence and Due Care as set out at paragraph 2100.1 A1(c) of the Code of Ethics (effective from 1 May 2020), between 13 December 2017 and 13 April 2021 as Trustee in Bankruptcy of ‘X’, in relation to the engagement of ‘Y’, as the member failed to ensure that:
   • the work necessitated being undertaken by ‘Y’; and/or
   • that the costs incurred by ‘Y’ were fair and reasonable; and/or
   • they retained sufficient control over the work undertaken by ‘Y’.
2. failed, as Trustee in Bankruptcy of ‘X’, to create or maintain any or sufficient records between 13 December 2017 and 22 December 2017 in relation to the appointment of ‘Y’ such that a reasonable and informed third party could not reach a view on the appropriateness of their actions. This is contrary to paragraph 400.75 of the Code of Ethics (Part D) (effective to 30 April 2020).

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

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