Accountants often face disciplinary proceedings from one of the six regulators who protect the professions and, in these cases, they seek legal counsel from lawyers. Accountancy law is just one of many areas of professional disciplinary law we specialise in. The chartered accountant disciplinary process addresses allegations of misconduct in technical matters relating to the following areas:
- Actuarial practice
Legal accountancy regulations also address general misconduct issues in the management of a practice, or issues such as the commission of criminal offences or other anti-social behaviours, including posting offensive material on social media.
Do you require Regulatory or Disciplinary Advice?
Whether you need an actuary lawyer or advice on legal accountancy regulations from an accountancy practice lawyer, we can help.
Jeremy Barnett is experienced in the field of professional discipline, including accountancy law, having represented a number of accountants, solicitors, IFAs, company directors and healthcare professionals before disciplinary bodies and the higher courts. For four years he was a board member of the AADB and currently advises and speaks on the regulation and practice in respect of cryptocurrencies and other emerging technologies. If you are searching for an accountancy practice lawyer or actuary lawyer, contact Jeremy Barnett for advice.
The Regulators for Legal Accountancy:
The Financial Reporting Council [FRC]
The overarching regulator is now responsible for enforcement of audit requirements under the Audit Enforcement Procedure. They will investigate matters relating to the audits of Public Interest Entities (PIEs being listed entities, credit institutions and insurance institutions) AIM-listed companies with a market capitalisation in excess of £200m and Lloyds Syndicates.
Although other audit-related investigations have now been delegated to the recognised supervisory bodies such as the ICAEW, the FRC can still reclaim a case if it chooses to do so. The disciplinary board was formerly known as the Accountants and Actuaries Disciplinary Board [AADB]. A useful process guide to the enforcement procedure is available here.
Recent decisions involve accountancy law cases concerning major firms of accountants, including:
- Grant Thornton required lawyer accountancy services after a former senior partner providing services under a consultancy contract faced criticisms over eight audits in the course of four years. A severe reprimand and a £4m fine (discounted to £3m) was imposed.
- The firm and a senior auditor admitted misconduct concerning the financial statements of Ted Baker PLC. The firm was fined £3m (discounted to £2.1m), and a severe reprimand and costs were imposed. The auditor fined £80k (reduced to £46,800).
- A settlement agreement against the firm and former audit partner in relation to the 2014 audits of BHS and Taveta Group, resulted in a fine of £10m, a severe reprimand, conditions and undertakings against the firm and a fine of £500k. The former partner was also reprimanded.
- After receiving lawyer accountancy services, a regulatory settlement was reached with the firm and a member in relation to Tech Data Management. The firm was fined £2,750,000 (reduced to £1,800,000) and received a reprimand. The member was fined £90,000 (reduced to £59,000) and received a reprimand.
Institute of Chartered Accountants in England and Wales (ICAEW)
The ICAEW has always conducted disciplinary hearings and covers all areas of practice including fees, audit, failure to deal with correspondence, poor work and advice etc. There is a general duty for firms and practitioners to report a case of misconduct, which often calls for legal accountancy advice from an accountancy or actuary lawyer.
The ICAEW has a Code of Ethics, consisting of five fundamental principles, which applies to all members, students, affiliates and employees of member firms:
To be transparent in all professional and business relationships. Members are prohibited to be knowingly associated with misleading or fraudulent information.
Not to let personal bias or any conflicts of interest compromise professional or business judgements.
- Professional Competence
Ensure a client receives competent professional service by maintaining technical and professional standards according to relevant legislation.
The confidentiality of professional relationships must be respected at all times and confidential information must not be released to anyone outside the organisation without permission.
- Professional Behaviour
All professional accountants must comply with all current and relevant laws and regulations.
It is important to note that, if you are being investigated by ICAEW, it is essential to comply with their requests promptly, and with professional courtesy. Time is of the essence here as the ICEAW make fast decisions. By acting swiftly and producing a strong case, sanctions can often be reduced or even completely avoided.
Your barrister at St Pauls Chambers will be able to explain to you the legal options available given your circumstances and build a robust case to protect your career, reputation and that of your accountancy firm.
The Fitness Committee Regulations can be found here and the current bylaws can be found here.
Chartered Institute of Management Accountants (CIMA)
Cases often relate to poor performance and the provision of accountancy services with an appropriate and valid practising certificate. Lack of integrity often forms the basis for charges.
Recent decisions of the Disciplinary Committee can be found here.
Chartered Institute of Public Finance and Accountancy (CIPFA)
CIPFA has 14,000 members and is the professional accountancy body for people in public finance who work in various organisations where public money needs to be effectively and efficiently managed. Hearings can relate to legal accountancy issues or matters of public interest where there has been a conviction or another finding of dishonesty or lack of professional ethics.
Recent cases include allegations of fabricating information on tender documentation and falsification of material in respect of an application for admission.
Institute of Chartered Accountants in Ireland (ICAI)
The Institute’s regulatory and disciplinary obligations derive from both statute and its own bylaws and regulations. Cases relate to wide-ranging matters of legal accountancy misconduct but are aimed at protecting clients, investors, and those who rely upon the profession to provide accurate information. These matters also relate to personal conduct which affects the reputation of the profession. Recent decisions of the Tribunal can be found here.
Association of Chartered Certified Accountants (ACCA)
ACCA are one of the busier regulators in this field, as this is truly a global professional organisation, with over 100,000 members and over 130,000 students around the world. Disciplinary hearings often relate to allegations of examination misconduct and are notoriously difficult to conduct, often relying upon material that is not supported on oath from distant jurisdictions.
Institute of Chartered Accountants of Scotland (ICAS)
ICAS is also an international professional organisation, where one-third of the members work in business, and many work for the ‘big four’ accountancy practices, as well as smaller firms around the world.
The Royal Charter was originally granted to the Society of Accountants in Edinburgh, and the supplementary Charter of 1951 was granted when the Institute of Accountants and Actuaries in Glasgow and the Society of Accountants of Aberdeen joined.
The current rules were amended in August 2018, and are supplemented by several legal accountancy regulations dealing with public practice, investigations, client monies, CPD, examinations, admissions and the tribunal regulations. Click here for more details.
The Institute and Faculty of Actuaries (IFoA) Regulation Board
IFoA’s purpose is to help instil confidence of the public and other stakeholders in actuaries and their work by developing a quality framework, promoting the observance of high standards and building relationships with other stakeholders.
Disciplinary cases involving actuaries range from highly technical allegations, requiring expert evidence, to numerous cases involving examination misconduct by student members.
Recent decisions can be found here.
Lawyers for Accountants
If you require help with accountancy law or are seeking an accountancy practice lawyer or actuary lawyer, please get in touch. Jeremy Barnett is one of the field’s leading lawyers for accountancy and has deep knowledge and a breadth of experience in dealing with accountancy regulations and professional discipline.