Wednesday, December 05, 2012

ICAEW Withdraws Audit Qualification of 713 Members

As per Economia there has been a wee bit of an administrative snafu within the ICAEW, that will negatively impact 713 members erroneously given an audit qualification since 2008:
"More than 700 ICAEW members are to have their audit qualification withdrawn after the discovery of an administrative error in the ICAEW Learning and Professional Development department.

This resulted in their receiving the qualification although their audit experience did not match the eligibility criteria. The error does not affect their ACA qualification or their ICAEW membership.

Letters are on the way to the 713 members who were among 28,000 members given the qualification over the past four years on the basis of their audit experience. This was part of an initiative, launched in 2008, that was designed to ensure that ICAEW-registered audit firms were helped to maintain compliance with EU legal obligations which require them to be controlled by qualified auditors.

As firms had widened their interests into other, non-audit areas, it became more difficult to ensure that 51% of the partners were audit qualified. However, there were plenty of ICAEW members who met the eligibility criteria, even though they no longer worked in straight audit.

To save the members having to write an extensive and time-consuming narrative detailing all their audit experience, and obtain fresh counter-signatures, ICAEW drew on its records for evidence of eligibility. The problem arose because members who trained outside the UK or in a crown dependency were mistakenly included when they shouldn’t have been. Strict restrictions set by UK company law require members to have gained their key experience for the audit qualification in UK statutory audit work.

“As soon as we became aware of the anomalies, we contacted the FRC and set up an internal inquiry,” said Mark Protherough, ICAEW executive director for learning and development. “We have now restructured the department to ensure that the right oversight is in place and that this sort of administrative mistake does not happen again.

“We apologise to those members who were awarded the audit qualification when they shouldn’t have been.” 

Those affected members who believe they do in fact fulfil the eligibility criteria should get in touch with ICAEW.

The institute thinks it unlikely that firms will find they do not comply with the 51% rule as a result of the mistake. However, if they are concerned, they should also get in touch."

How is it this error has taken four years to surface, and has only now been discovered?

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