Tuesday, November 23, 2021

ICAEW Paid Tory MP £14K - Money Well Spent?

 


Ben Everitt, the MP for Milton Keynes North, was paid nearly £14,000 for 60 hours of work for the Institute of Chartered Accountants in England and Wales (ICAEW), according to Financial News, which first reported the story.

He spoke in Parliament against extensions to the IR35 tax law that the ICAEW has been pushing to delay.

Everitt’s conflict of interests is the latest to come to light in a string of recent scandals involving MPs holding paid consultancy roles.

“As a professional body serving the public interest, ICAEW will routinely provide technical briefing material for parliamentarians and civil servants on major issues within its area of expertise,” an ICAEW spokesperson told City A.M.

“This Representation by our Tax Faculty on IR35 in June of last year was treated in this way and published on our website at the time, and remains freely available and accessible,” the spokesperson added.

City A.M. understands Everitt concluded his ICAEW contract in January this year. 

Has ICAEW members' money been well spent?

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Thursday, November 11, 2021

Deloitte - The Fox in Charge of The Hen House?


 

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Wednesday, November 10, 2021

Happy International Accounting Day! - #InternationalAccountingDay


 

International Accounting Day is celebrated on the anniversary of the publication of a critical work in the 15th century by the Italian mathematician Luca di Borgo.

Fra Luca Bartolomeo de Pacioli (sometimes Paccioli or Paciolo; c. 1447 – 19 June 1517) was an Italian mathematician, Franciscan friar, collaborator with Leonardo da Vinci, and an early contributor to the field now known as accounting

He is referred to as "The Father of Accounting and Bookkeeping" in Europe and he was the first person to publish a work on the double-entry system of book-keeping on the continent. He was also called Luca di Borgo after his birthplace, Borgo Sansepolcro, Tuscany

However, the history of accounting dates back several millennia. Records and documents originating from the Mesopotamian region traced back as far as 5,000 B.C. reveal the employment of accounting systems in the service of tracking the exchange of goods between temples. 

Further evidence of the prevalence of accounting would appear from discoveries in ancient Egypt and Babylonia, but the most comprehensive findings would first originate from materials belonging to the period of the Roman empire. Information notated across innumerable archives during this era show detailed quantifications kept across areas, spanning public revenues, private expenditures, the distribution of commodities, and more.

The field of accounting has undeniably developed significantly since its introduction in pre-modern times. It would experience especially robust advancements throughout the Middle Ages and the Renaissance period.

The discipline would go on to see a sharp rise in necessity and demand in the fields of business and finance starting in the mid-19th century. The Industrial Revolution would prove to increase the number and size of companies across the world to an unprecedented degree, and it became imperative for corporations to maintain strong accounting departments to have a part in all aspects of business’ operations. 

The combined membership of the five CCAB bodies – ICAEW, ACCA, ICAS, CIPFA and Chartered Accountants Ireland – amounts to some 275,000 professional accountants in the UK and the Republic of Ireland (415,000 worldwide).

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Wednesday, November 03, 2021

ICAEW Cold Calling Members


 

Any other members been cold called by the ICAEW?

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Monday, October 25, 2021

Keep an Eye on The Exam Systems Page

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Friday, October 15, 2021

KPMG Found To Be Untruthful - Whither Professional Standards?


 

The Financial Reporting Council (FRC) published a summary of a tribunal that found a senior partner at KPMG had presented an “untruthful” defence during a disciplinary hearing.

The FRC hearing was convened to investigate KPMG’s misconduct during the sale of bedmaker Silentnight to a private equity fund. The tribunal found that partner David Costley-Wood failed to co-operate with the accounting regulator’s investigators. 

During August of this year, KPMG was fined £13m and incurred costs of over £2.75m for its role in placing Silentnight into a insolvency process during 2011 that allowed private equity firm HIG Capital to acquire it without the burden of a £100m pension scheme liability.

KPMG’s lack of objectivity and “obvious” conflict of interest was the latest in a string of public humiliations including lawsuits and disciplinary complaints relating to audits the firm carried out at Carillion, Rolls-Royce and Conviviality, the owner of Bargain Booze.

This latest sanction was a huge financial hit for the Big Four firm. The tribunal report states that for the first time ever, the tribunal found a respondent had advanced dishonest evidence. 

Costley-Wood, who faced fines of £500,000 for his involvement in the original case, claimed that Silentnight faced a “burning platform” prior to the debt sale agreement. However, the tribunal stated: “The defence put forward by Mr Costley-Wood in relation to the burning platform was a construct invented by him to assist in his defence.”

The FRC said mounting an untruthful defence “seriously risks undermining the regulatory system [and] compounds the original failings”.

Not unreasonably decent, professional, honest members of the ICAEW are asking why the shameful behaviour of the larger firms is not being addressed adequately by the ICAEW.

The subject of ethics brings to mind my application for the role of the ICAEW's Ethics Examiner in 2005. 

As I noted in 2005 I was invited for interview on 19th October, along with 24 other candidates who had applied for the other 11 papers. Prior to the interview I was sent the 5 page Ethics syllabus to read through, together with some other information and a training disc.

I had a one to one 20 minute interview, then a 45 minute panel interview. Seemingly I was the only person to specify Ethics as my first/only choice of paper.

I was told that I would hear by the end of the month, and that if chosen I would have to make a decision quickly; as work on the paper would start in November.

I received an email on the 1st of November which stated that since the interviews the ICAEW had rethought the approach to Ethics, and that there may well not be an assessment of the kind envisaged.

As such no Ethics exam team would be appointed.

Well then!

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Thursday, September 02, 2021

The Profession Finally Recognises The Value of Internal Audit


Accountancy Age states that a more collaborative relationship between internal and external audit will be a critical step as the profession strives to increase quality and bolster its standing in the public eye, according to industry voices.

“I think it would produce much stronger assurance,” says Liz Sandwith, chief professional practices advisor at the Chartered Institute for Internal Auditors (CIIA). 

“Each side knowing and understanding that control environment and what new and emerging risks are being mitigated, would help them both do their job that much better.”

Though fundamentally similar, several disparities exist between the two functions. Internal audit will examine issues related to business practices, while their external counterparts issue opinions regarding financial statements and records.

The purpose of the two sides is also key. Internal audit reports act as a tool for the organisation’s management, whereas external audit caters to key stakeholders such as lenders, investors and creditors.

“Internal audit are there 365 days a year and, therefore, have a much greater understanding of the organisation, and a much broader remit. There is a real opportunity for external audit to build on this knowledge rather than repeating it.”

Sandwith’s view largely resembles that of Sir Tony Redmond, who was commissioned by the UK government in 2020 to conduct a review into the effectiveness of external audit and transparency of financial reporting in local authorities. While focusing on the external side of audit, the review makes several references to its relationship with internal auditing.

“There is a question as to whether external audit could make more use of the knowledge and expertise of internal audit in developing sufficient understanding of the local authority,” it said.

“Internal auditors are likely to be much closer to the business than external audit and, in many authorities, a proportion of their work focuses on governance and service delivery matters. This could make internal audit a rich source of knowledge, should the external audit team wish to use it.”

I find it more than a little ironic that the usefulness of internal audit, and the need for collaborating with it, is only now being discussed when in 2002 I wrote about the Added Value of Internal Audit here is a brief extract:

"Internal audit provides independent objective assurance to the Board as to the adequacy of the business controls, and the effectiveness of the risk management and risk identification process.

In other words, the internal audit department should tell the Board when the company is being poorly managed, where risks are not being identified or mitigated and when the business objectives are not likely to be met.

In addition to this very wide ranging remit, a well run internal audit department adds value in the following ways:

 It acts as a training ground for future line managers, by exposing fast track members of the department to a variety of situations, activities and functions within the organisation.

 It provides a “one stop shop” for best practice advice.

 It provides an independent, objective opinion as to the quality of the business controls.

 It stimulates risk awareness throughout the organisation.

 It is a source of qualified, experienced talent that can aid management in business improvement programmes.

 It provides specialist professional independent opinions on a variety of situations; such as due diligence exercises.

 It reports on fraudulent activity within the organisation, with a view to understanding how it happened and how to prevent it occurring again.

 It ensures that the company wide initiatives, such as a code of conduct, are being adhered to.

In 2003 I went on to list the Attributes of a World Class Internal Audit Department  based on my experience as Head of Internal Audit and International Forensic Co-ordinator, in both Philips and De Beers.

It is more than a pity that it has taken almost 20 years for people to realise the worth of a well run internal audit department!

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Friday, August 06, 2021

Rebecca Cave Calls on Women To Step Forward For The FRC

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Thursday, July 22, 2021

Server Problems Stop Case Study Exams


 

Commiserations to the all the students submitting their case study exams yesterday, who were affected by server problems.

You are advised to contact the ICAEW via this link

Here are details from the ICAEW site

22 July

July Case Study exam
Unfortunately, during the Case Study exam yesterday, we encountered an issue with server capacity. Although our supplier had upscaled the server capacity to its maximum level, due to an underlying issue, the capacity was still was insufficient. Some students’ exams were paused, and we were unable to restart exams for some students. We do have the exam answers up to the point before the pause. We are investigating how we can fully and fairly assess all students affected in the next few weeks to ensure they keep on your career path. We will contact those students in the next few days with more details and options. Please accept our sincere apologies for any stress and inconvenience caused.If you have any questions regarding this please contact student support via icaew.com/webchat

21 July

July Case Study exam
All students who sat today's Case Study exam in UK exam centres and were severely affected have now been contacted via email about the issues some faced during the exam. We will contact students affected by these issues in the next few days with further details and options. Please accept our sincere apologies for any stress and inconvenience caused by these issues.

July Case Study exam
If you sat your Case Study exam today and experienced connection issues when trying to submit your exam, we apologise for this issue. We are aware that this issue has occurred and affected a number of students. If you sat your exam in centre, please be advised that the invigilator is aware of this issue and they will liaise with us to rectify this. If you sat your exam remotely, we advise that you leave your screen as it is, do not close any tabs and please attempt to submit your exam later, otherwise, we will upload your exam centrally.

July Case Study exam
Unfortunately due to a server load issue we have had to pause some of the Case Study exams temporarily in UK exam centres. We intend to resume the exam at 1:30, continuing from the point the exam was paused. We apologise for the stress and inconvenience this may cause. Affected students have been notified by their invigilator.

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Tuesday, June 22, 2021

KPMG Put on The "Naughty" Step

 

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