ICAEW Drops Charges For Expert Content

 

 

Expert content will be provided at no additional cost in 2023, and ICAEW members are encouraged to make the most of their membership.

As part of a wider initiative to support members with their lifelong learning, from January 2023 ICAEW’s membership will include access to the content of the Audit and Assurance Faculty, Financial Reporting Faculty and Tax Faculty, and all ICAEW Communities. ICAEW members will no longer need to pay an additional fee to access these groups and their content. 

ICAEW is determined to ensure that members receive as much value as possible from their membership, as well as having the opportunity to stay up to date with the latest developments and requirements for the profession, says Iain Wright, ICAEW’s Managing Director, Reputation & Influence. “Professionals need information in real time, when their business or clients demand it. The removal of paywalls for areas such as Audit, Tax and Financial Reporting, as well as Communities, will give all members access to the valuable and rich content produced by these groups.”

Once logged into the ICAEW website, members will be able to access the content without paying extra. “We want to make it as easy as possible for members to find what they need, when they need it. However, we strongly recommend members take a moment to join the faculties and communities that are most relevant to them, their interests and their careers to get the full benefit of tailored communications and networking opportunities at no extra cost and discounted rates for certain events.

“Faculties and communities have been and will continue to be the lifeblood of our thought leadership and technical expertise, providing insights for members, governments and regulators that raise the reputation of our profession and improve the business environment for the economy,” says Wright.

The current subscription model will continue to operate for the Corporate Finance and Financial Services Faculties. Non-ICAEW members will also be charged in the normal way.

About time too!

However, it should be noted that Corporate Finance is excluded.

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KPMG Sanctioned and Fined £14M

The Financial Reporting Council (FRC) today announces sanctions against KPMG LLP (KPMG), a former KPMG partner and four former KPMG employees, following an investigation undertaken pursuant to the Accountancy Scheme. The investigation related to the provision of false and misleading information and documents to the FRC in connection with the FRC’s Audit Quality Reviews of two audits carried out by KPMG: the audit of the financial statements of Regenersis plc for the period ended 30 June 2014 (“the Regenersis audit”); and the audit of the financial statements of Carillion plc for the period ended 31 December 2016 (“the Carillion audit”). 

An independent Disciplinary Tribunal made findings of Misconduct following a five-week hearing during January and February 2022 and sanctions were determined following a hearing in May 2022.
KPMG admitted its liability for the acts of all the individuals and that those acts amounted to Misconduct.

Sanctions

KPMG has been:

• fined £20 million, reduced to £14.4 million to reflect KPMG’s self-reporting, co-operation, and admissions;
• severely reprimanded; and
• ordered to appoint an independent reviewer to conduct a review to consider the effectiveness of KPMG’s current AQR policies and procedures in supporting high quality engagement with the AQR inspectors.

 
Mr Meehan has been excluded from membership of the ICAEW for a period of 10 years, and fined £250,000.

Mr Wright has been excluded from membership of the ICAEW for a period of 8 years, and fined £45,000.

Mr Bennett has been excluded from membership of the ICAEW for a period of 8 years and fined £40,000.

Mr Kitchen has been excluded from membership of the ICAEW for a period of 7 years, and fined £30,000.

Mr Paw was severely reprimanded.

Costs

KPMG agreed to pay £3.95 million towards Executive Counsel’s costs of the investigation together with the costs of the Tribunal.

 

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ICAEW Trousers £14M Carillion Fine - "Shameful!"

 

The Institute of Chartered Accountants in England and Wales (ICAEW) is once again facing a barrage of criticism after it was confirmed this week that KPMG’s £14.4m Carillion audit fine will be paid to ICAEW because the regulatory action fell within the accountancy scheme, which was introduced in 2004.  

As KPMG tries to repair its damaged reputation, politicians and ICAEW’s own members are questioning why the professional body is retaining all of the fines. 

Accountancy scheme 

In recent years, ICAEW has received KPMG’s £13m fine from the Silentnight insolvency and Deloitte’s record £15m fine over the audit of ill-fated software firm Autonomy.

With costs included, and the addition of the recent Carillion fine, the combined total from these fines exceeds £50m – and if you were to look further back, ICAEW has gathered £123.4m since 2004.

However, ICAEW can lay claim to the fines because, under the funding arrangements, professional bodies pick up the cost of investigations by the Financial Reporting Council (FRC) in advance. 

In return professional bodies get the money from any fines, rather than that pot of money being used as compensation. Alternatively, though, when a case is brought to tribunal by the regulator and there isn’t a fine, the professional body bears the cost instead. ICAEW also points out that even where fines have been imposed, some cost orders do not fully reimbuse professional bodies for the whole costs of the investigation.  

The institute also stresses that the money received from fines is not used to offset ICAEW’s operational expenditure but is “allocated to our strategic reserves and it supports our wider commitment to serve the public interest, as required by the terms of our Royal Charter”.

While ICAEW has retained the costs, as it was legally entitled to, the move has roused similar criticism that was aimed at the institute when it received the KPMG’s Silentnight £13m fine, rather than the pension holders who were set to lose around 30% of their pot due to the mattress company falling into insolvency. That incident prompted The Times’s columnist Patrick Hosking to fume, “the more dishonesty and fraud discovered in the profession, the more profit the institute stands to make”.

Criticism

The pressure on ICAEW comes as KPMG agreed to pay the fine, reduced from £20m, after a five-week trial found five former KPMG auditors guilty of forging documents. 

KPMG has previously been accused of failing to maintain professional independence as the auditor of Carillion and missing multiple “red flags”. Creditors claim to have lost billions of pounds in dividends, advisory fees and losses as it continued to trade.

But the fine going to ICAEW has only reignited the condemnation previously heard during the Silentnight episode. Former pensions minister Baroness Altmann has added her voice to the calls for the money to go to the creditors and not ICAEW, saying: “Something has gone wrong here.” 

Meanwhile, ICAEW members have also expressed concern over how the perception of the institute keeping the proceeds will tarnish the brand. Chartered accountant and ICAEW critic Ken Frost was particularly scathing. “I think it is shameful that my professional body seeks to profit from the wrongdoing of member firms,” said Frost. “It is, of course, quite correct that the ICAEW issued the fine. However, it is shameful that they have decided to ‘trouser it’ like a spiv City trader from the 80s.

“Additionally, it beggars belief that the ICAEW thinks that this won’t damage their brand!”

A different approach

The accountancy scheme is set to wind down soon as part of a government reform and the funding arrangements are also expected to switch to the government. 

Despite the removal of the accountancy scheme, professional bodies must continue to fund investigations of all new complaints brought by the FRC under the audit enforcement procedure.

An ICAEW spokesperson said that the professional body would welcome the rationalisation of the “different schemes which now exist to pay for this aspect of the FRC’s regulatory work.” 

They continued: “We do not believe that any of the professional bodies would object to being removed entirely from the funding process, with all fines in future going to HM Treasury. We would be happy to discuss this with BEIS [the Department for Business, Energy and Industrial Strategy], the FRC or – when it is eventually established – ARGA.”

I have been asked by the ICAEW to point out that the ICAEW did not issue the fine.  The fine was issued by an independent tribunal of the FRC and the size of any fine was entirely their decision.

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Richard Murphy FCA Calls Accountants Corrupt

 

The UK has been corrupted and accountants, lawyers and bankers are to blame https://t.co/i1Ev371kIx The corruption that is now normal in public life has its root in the belief held by so-called professionals that getting around the law is their public duty

— Richard Murphy (@RichardJMurphy) February 21, 2022

Badly drafted laws will always be legitimate targets for human ingenuity, it is not a sign of corruption that people look for ways and means within the law to reduce their tax bills!

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The ICAEW's Nice Little Earner

The ICAEW has defended its decision not to donate £13.5m it received in fines from the Silentnight insolvency to the bankrupt firm’s pension fund following a barrage of criticism.

Political and media pressure to compensate the bed company’s pension holders with the award from the Financial Reporting Council (FRC) prompted the Institute to respond that it had not been gifted a “windfall” and that the costs of its investigations are rarely reclaimed.

KPMG was sanctioned in August 2021 over its conduct in the sale of Silentnight, which became insolvent, as the Silentnight Pension Scheme ended up in the Pension Protection Fund.

David Costley-Wood, former partner and head of KPMG Manchester Restructuring, was severely reprimanded and penalised £500,000 for his role in the sale and excluded from the ICAEW for 13 years.

The ICAEW board had voted to retain the proceeds of the fine, as it was legally entitled to, rather than reimburse Silentnight’s pension fund. In response, the All Party Parliamentary Group on Fair Business Banking criticised the decision, stating that Silentnight’s staff had been “ripped off by one of the body’s own members”.

Writing to APPG Banking co-chairman Kevin Hollinrake MP, ICAEW chief executive Michael Izza said that, although the board “had sympathy” with members of the Silentnight Pension Scheme who may have suffered losses, it would not be passing on the £13.5m as compensation.

While the ICAEW board considered the merits of the request, it said the Accountancy Scheme, which details how cases are dealt with by the FRC, “was never intended to operate as a compensation scheme for third parties who may have suffered losses as a result of actions of ICAEW members and member firms.” 

What will the ICAEW do with its windfall?

Will it reduce members' subscriptions?

Of course it won't! 

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The Merger That Dare Not Speak Its Name!

 

AccountingWeb note the following about the merger/non merger talks between CIPFA and the ICAEW:

"ICAEW also noted that the outcome of the discussions will be subject to approval within the institutes and by key external stakeholders.

We won’t know the details of the talks until early 2022, when the two bodies will bring forward the formal proposals, but an ICAEW spokesperson told AccountingWEB that "At this stage we do not believe that the nature of the relationship with CIPFA under discussion would require an ICAEW membership vote." 

That to me sounds as though they hope that they won't need membership approval, even though they say it will need approval within the institutes!

Can someone enlighten me as to how the institutes can approve something, if they don't ask the members to vote?

It seems one change will be faster routes to membership:

"The Institute can't say whether the closer relationship would mean a fast-tracked entry into either membership except, "We envisage any closer working would bring benefits to both ICAEW and CIPFA members. However, at this stage, it is too early to say what implications it may have on our Pathways to Membership scheme."

While the word ‘merger’ wasn’t mentioned in the press release, Ken Frost, who was a vocal opponent of the merger last time around, believes “this is an attempt at a merger by the backdoor”. 

“The fact members will have to vote on this cooperation validates that view,” he told AccountingWEB. “Suffice to say the arguments against the merger, that I put forward on my site in 2004, are still valid.

However, an ICAEW spokesperson confirmed to AccountingWEB that "a merger is definitely not the starting point for our current discussions".

"We are exploring various options, which go beyond any past relationship with CIPFA, and any outcome to these discussions will be subject to approval within the Institutes, as appropriate and necessary under their respective governance requirements, and by key external stakeholders including the UK Government, the Privy Council and regulators."

To my view, based on what the ICAEW have said, this is a merger that dare not speak its name - lest the members be required to vote on it!

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Merger By The Backdoor?

 

‘@CIPFA and @ICAEW discuss potential for closer working’ … no sign of the ‘m’ word in the press release - but I thought the pair had a strategic partnership post-failed merger anyway? @ken_frost

— Kevin Reed (@Goonerreed) December 8, 2021

Don't you dare! 

Here is the text of the press release, it is clear that they are proposing a merger!

08 December 2021 PRESS RELEASE: 

CIPFA and ICAEW discuss potential for closer working

Professional chartered accountancy bodies, CIPFA and ICAEW, have announced that they are in talks to explore the potential of closer working.

The vision driving the discussions would see CIPFA and ICAEW combining their strengths and resources to better equip them to serve the public interest across all areas of economic activity, including the enterprise, public and third sectors.

In a joint statement, CIPFA Chief Executive Rob Whiteman and ICAEW Chief Executive Michael Izza said:

“We believe there is significant strategic benefit in our two bodies working more closely in the future and our discussions will examine ways of achieving that.”

CIPFA and ICAEW will now conduct further discussions with the aim of bringing forward proposals in 2022.

Any outcome to these discussions will be subject to approval within the Institutes, as appropriate and necessary under their respective governance requirements, and by key external stakeholders including the UK Government, the Privy Council and other regulators.

NOTES TO EDITOR:

About ICAEW

There are more than 1.8m chartered accountants and students around the world and 186,500 of them are members and students of ICAEW. They are talented, ethical and committed professionals, which is why all of the top 100 Global Brands employ chartered accountants.

ICAEW promotes inclusivity, diversity and fairness. We attract talented individuals into the profession and give them the skills and values they need to build resilient businesses, economies and societies, while ensuring our planet’s resources are managed sustainably.

Founded in 1880, we have a long history of serving the public interest and we continue to work with governments, regulators and business leaders around the world. And, as an improvement regulator, we supervise and monitor over 12,000 firms, holding them, and all ICAEW members and students, to the highest standards of professional competency and conduct.

ICAEW is proud to be part of Chartered Accountants Worldwide, a global network of 750,000 members across 190 countries, which promotes the expertise and skills of chartered accountants on a global basis.

We believe that chartered accountancy can be a force for positive change. By sharing our insight, expertise and understanding we can help to create strong economies and a sustainable future for all.

*Source: CAW, 2020 – Interbrand, Best Global Brands 2019

For more information please contact the CIPFA press office on +44 20 7543 5885 or email mark.davey@cipfa.org, or the ICAEW media office on 07918 767 822 or email media.office@icaew.com

About CIPFA

CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. CIPFA shows the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money.

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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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Deloitte - The Fox in Charge of The Hen House?

 

Guess who’s been put in charge of preparing the “knowledge management system in preparation for the public inquiry” into Test & Trace failings? Deloitte, the very consultants who got hundreds of millions in contracts to, er, run Test & Trace. Full story in the new Eye, out now.

— Private Eye Magazine (@PrivateEyeNews) November 10, 2021

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