Disciplinary costs see institute post £1.6m deficit

ICAEW headquarters

The institute’s annual review, out this week, revealed the deficit, which also coincided with a significantly increased cost base. It recorded a surplus of £5.4m last year before taking the JDS costs into account, which fell to £1.75m before JDS costs this year.

The costs of Chris Dickson’s disciplinary scheme roughly doubled on 2006, the ICAEW said.

The institute said the loss would be funded by ongoing operations and reserves. ‘We won’t be going to members [to ask for money],’ a spokesman said.

Despite a rise in income of 8.5%, the institute has also had to spend more on the ACA qualification, global expansion and sending out Accountancy magazine to members.

ICAS recently said it had also had to increase its contribution to the JDS, too, with the costs of the Equitable Life case thought to have driven up the disciplinary body’s costs.

ICAS increased its contribution to the JDS by £367,000 for 2007.

The institute revealed it had increased its budget due to the scale of the case, which lasted for 66 days.
The tribunal is looking at why Ernst & Young auditors gave an ‘unqualified’ audit opinion on Equitable Life’s accounts from 1990 to 2000 when, the JDS case alleges, the accounts were not prepared in line with company law rules.