Monday, September 18, 2023

Go Woke, Go Broke - UN Sustainable Development Goals

 


For reasons best known to itself, the ICAEW has waded into geopolitics in the form of an open letter to the UK government on the subject of the UN sustainable development goals.

These goals will achieve nothing, other than bankrupt the Western nations who are foolish enough to impose them on their unwilling and increasingly ignored/put upon taxpayers.

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Tuesday, September 12, 2023

The Merger That Dare Not Speak Its Name



As Kevin Reed correctly points out, this is a merger in all but name.

Why are the ICAEW and CIPFA so reluctant to use the word "merger"?

The answer is because they know they would have to ask their members to vote on it!

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Monday, September 11, 2023

CIPFA and ICAEW Fast-track Pathway To Dual Membership - Merger By The Backdoor


 

Today's announcement by CIPFA and the ICAEW of a fast-track pathway to dual membership has raised eyebrows among some in the accountancy profession. Some see it as a positive development, as it will allow accountants to move more freely between the public and private sectors. Others, however, are more sceptical, and believe that it is simply a backdoor to a merger between the two bodies.

There are a number of reasons why this scepticism is justified. First, the two bodies have been working more closely together in recent years. In 2021, they signed a memorandum of understanding to "explore opportunities for closer collaboration". This collaboration has included sharing resources and expertise, and working together on joint initiatives.

Second, the fast-track pathway to dual membership is not the only way that accountants can move between the two bodies. CIPFA members with less than five years' experience can already apply to join ICAEW through the Pathways to Membership programme. And ICAEW members with less than five years' experience can already apply to join CIPFA through the Fast Track Route.

So why did CIPFA and ICAEW feel the need to create a new fast-track pathway? 

One possibility is that they are simply trying to make it easier for accountants to move between the two bodies. However, it is also possible that they are laying the groundwork for a merger which would dilute the ICAEW brand.

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Monday, July 03, 2023

Insolvency Service Raps ICAEW Over Banned Member


 

The Insolvency Service has reprimanded the Institute of Chartered Accountants in England and Wales (ICAEW) for its failure to monitor a banned member who stole nearly £4 million in estate assets.

The banned member, who was not named in the Insolvency Service's report, was convicted of fraud in 2017 and banned from practician as an insolvency practitioner for 15 years. However, the ICAEW did not take any steps to monitor the member after his conviction, and he was able to continue to practice as an insolvency practitioner under a different name.

The Insolvency Service found that the ICAEW's failure to monitor the banned member was "a serious lapse in professional conduct" and that the institute had "failed to protect the public interest." The ICAEW has been ordered to pay £10,000 in costs to the Insolvency Service.

In a statement, the ICAEW said that it "deeply regrets" the lapse in professional conduct and that it has "taken steps to ensure that this does not happen again." The institute said that it has "strengthened its monitoring procedures" and that it is "committed to protecting the public interest."

The ICAEW's failure to monitor the banned member is a serious lapse in judgement and it is clear that the institute needs to do more to protect the public interest. The Insolvency Service's reprimand is a wake-up call for the ICAEW and it is essential that the institute takes steps to ensure that this does not happen again.

In the meantime, the public should be aware of the risks associated with working with an ICAEW member who has been banned from practicing. If you are considering hiring an ICAEW member, you can check their status on the ICAEW's website.

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Friday, June 30, 2023

KPMG and PwC Get a Scolding From The FRC

 


Two of the world's largest accounting firms, KPMG and PwC, have been fined by the Financial Reporting Council (FRC) for their audits of Eddie Stobart Logistics.

KPMG was fined £877,500 for its 2017 audit of the lorry company, and also fined one of its former partners, Nicola Quayle, £45,000. PwC was fined £1.9 million for its 2018 audit of Eddie Stobart.

The FRC found that both audits had failed to meet certain requirements, including gathering enough relevant and appropriate evidence regarding the services provided by Eddie Stobart during certain transactions. This prevented them from attributing the revenue generated by those services and recognising it upfront in the financial year.

In a statement, KPMG said it "accepted the findings of the FRC and has taken steps to improve its audit processes". 

PwC said that it "is committed to high quality audits and takes the findings of the FRC seriously." The firm said that it has "implemented a number of actions to address the issues identified" and that it is "confident that our audits meet the highest standards."

The sanctions against KPMG and PwC are the latest in a series of fines and reprimands that have been handed down to the Big Four firms in recent years. In May 2022, KPMG was fined £14.4 million for its audit of Rolls-Royce.

The FRC's actions are a sign that it is taking a tougher stance on audit quality. The regulator has said that it wants to see the Big Four firms "raise their game" and improve the quality of their audits.

The sanctions against KPMG and PwC will also have a knock-on effect on the companies that they audit. Investors and other stakeholders will be more likely to question the reliability of the financial statements of companies that are audited by these firms.

This could lead to higher costs for companies, as they may need to invest more in their internal controls and risk management systems. It could also make it more difficult for companies to raise capital from investors.

The sanctions against KPMG and PwC are a reminder that the audit function is vital to the financial markets. Investors and other stakeholders rely on auditors to provide an independent and objective assessment of a company's financial statements.

When audits fail to meet the required standards, it can have a significant impact on the markets and the businesses that are affected. The FRC's actions are a step in the right direction to ensure that the Big Four firms take their audit responsibilities seriously.

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Thursday, June 22, 2023

A Year of Influence - #ICAEWROAR





 

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Tuesday, June 20, 2023

ICAEW in Hot Water Over Lavish CEO Severance Package


 

The Institute of Chartered Accountants in England and Wales (ICAEW) is facing intense scrutiny over a secret six-figure severance package being handed to its retiring chief executive, Michael Izza.

The payment, which could amount to as much as twice Izza's annual base salary of £492,000, has been met with anger and disbelief by many in the accounting profession.

It comes at a time when the ICAEW is already under fire for its retention of fines imposed on audit firms. In 2021, the ICAEW pocketed a £13.5 million penalty from Silentnight, the mattresses retailer, rather than using the money to reimburse pensioners who had been disadvantaged by corporate governance failings.

The ICAEW has defended the payment to Izza, saying that it is "in line with market rates" and that it is "appropriate" given his length of service and achievements.

However, critics argue that the payment is excessive and that it sends the wrong message at a time when the ICAEW is supposed to be promoting high standards of corporate governance.

"This is a staggering amount of money to pay to someone who is already very well-paid," said one industry insider. "It's a slap in the face to the thousands of accountants who work for the ICAEW and who are paid a fraction of what Izza is getting."

The ICAEW has said that it will publish the full details of the severance package in its next annual report. However, that is unlikely to do much to quell the anger that is already brewing.

This is just the latest in a series of controversies to hit the ICAEW in recent years. The organization has been criticized for its handling of the Carillion collapse, its close ties to the Big Four audit firms, and its failure to crack down on widespread corporate fraud.

The decision to hand Izza a six-figure severance package is likely to further damage the ICAEW's reputation and raise questions about its commitment to transparency and accountability.

The ICAEW is in hot water. They're handing a lavish sum to their retiring CEO, Michael Izza, amid a row over fines imposed on audit firms.

People are angry. They say the payment is excessive and sends the wrong message.

The ICAEW has defended the payment, saying it's in line with market rates. But critics say that's not good enough.

This is just the latest in a series of controversies to hit the ICAEW. They're in danger of losing the public's trust.

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Wednesday, May 17, 2023

ICAEW To Change CPD Requirements

 


The Institute of Chartered Accountants in England and Wales (ICAEW) is changing its Continuing Professional Development (CPD) requirements from November 2023. The new rules will introduce a minimum number of hours that members must complete each year, as well as a mandatory ethics requirement.

The following are the key changes to the ICAEW CPD requirements:

  • Minimum number of hours: From November 2023, all members will be required to complete a minimum of 20 hours of CPD per year.
  • Verifiable hours: A minimum of 10 of the 20 hours must be verifiable, meaning that members must be able to provide evidence of the CPD activity they have undertaken.
  • Ethics requirement: Members will be required to complete a minimum of one hour of ethics training each year.

The new CPD requirements are designed to ensure that ICAEW members remain up-to-date with the latest developments in their profession and that they are able to demonstrate high standards of ethical conduct.

The following are some of the benefits of the new CPD requirements:

  • Members will be better equipped to deal with the challenges of the modern workplace.
  • Members will be able to demonstrate their commitment to continuous learning and professional development.
  • Members will be able to uphold high standards of ethical conduct.

ICAEW members can find more information about the new CPD requirements on the ICAEW website.

Here are some additional details about the new CPD requirements:

  • CPD categories: Members will be placed in one of four CPD categories, based on the type of work they do. The categories are:
    • Category 1: Accounting and finance professionals
    • Category 2: Business professionals
    • Category 3: Other professionals
    • Category 4: Retired members
  • Ethics training: The ethics training that members are required to complete must be aligned to the ICAEW Code of Ethics. The training can be delivered in a variety of formats, including online courses, webinars, and workshops.
  • CPD record keeping: Members are required to keep a record of their CPD activities. The record should include the following information:
    • The title of the CPD activity
    • The date of the CPD activity
    • The provider of the CPD activity
    • The number of hours of CPD
  • CPD audit: ICAEW may audit members' CPD records. Members who fail to comply with the CPD requirements may be subject to disciplinary action.

 

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Wednesday, April 12, 2023

EY Squanders Hundreds of Millions on Everest The Molehill


 

EY has scrapped plans to break up its audit and consulting businesses after months of internal disagreement and opposition from executives in the US. 

The plan, codenamed Project Everest, would have represented the biggest shake-up to the accounting industry in more than two decades. 

EY’s 18-person global leadership team, which approved the plan last September, sent partners a note on Tuesday saying the firm would now pursue a different deal.

Project Everest was championed by global chief executive Carmine Di Sibio as a way to free both sides of the business from conflict-of-interest rules that prevent consultants from selling many of their services to a firm’s audit clients. The independent consulting and tax advisory businesses would have been floated on the stock market. 

Under the break-up plan, consultants would have received shares in the new business worth up to nine times their annual pay, while audit partners would have been handed cash windfalls of up to four times their annual earnings. 

However, leaders of the US firm were unconvinced that cutting EY’s tax business down the middle was wise, and that the remaining audit-focused firm would be financially strong enough to maintain audit quality. 

EY has spent hundreds of millions of dollars on Project Everest, with more than 2,000 of its staff engaged in the planning. Doubtless EY's clients will end up footing the bill, one way or another!

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Monday, March 27, 2023

Izza To Retire


 

After 17 years as CEO of the ICAEW, Michael Izza has announced that he will retire at the end of 2023.

As per his email:

I wanted to let you know that after 21 years at ICAEW, I have decided to retire as its Chief Executive by the end of 2023. 

I trained as a Chartered Accountant almost 40 years ago, and it has been an honour to be Chief Executive of ICAEW, representing our profession across the world.

I would like to thank you - as valued members - and all our many volunteers for your support to me and commitment to ICAEW. I am immensely proud of what we have achieved together, and I have no doubt that the Institute will continue to flourish after I leave. 

As Chief Executive I have taken every opportunity to champion sustainability and I believe that chartered accountants have a vital role in helping society and the economy achieve net zero. Our 2030 strategy positions ICAEW well for the future and I am confident that the best is yet to come.

Regards,   

Michael Izza FCA

ICAEW Chief Executive"

I would like to take this opportunity to wish him well for his retirement.

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