The chief executive of the body, Paul Boyle, admitted this week that no cost provision had been made, as the implications of the Accountancy Investigation and Discipline Board’s crushing defeat began to sink in.

The lack of the provision could lead to the body having to go cap in hand to its paymasters – the government, companies and the firms – as it faced further criticism this week from a leading member of the profession, and details of a new legal exchange emerged.

Boyle told Accountancy Age this week: ‘There is no budget for these costs. If an award is made against us for costs, it will have to be met under existing funding arrangements. It’s too early to say whether this would involve any additional payments,’ said Boyle.

The FRC has a projected budget of £14.9m for 2006/2007.

Defendants, in particular PricewaterhouseCoopers, are now understood to be on the warpath in their attempts to recover costs, a decision on which is pending.

Seperately, it has emerged that Kingston Smith, whose partner Emile Woolf was criticised in the AIDB judgment, sent legal letters to the watchdog over the judgment, which some have speculated may have been the reason for the controversial delay in its release.

Boyle refused to comment on the issue. The letters are understood to point to factual inaccuracies.

Kingston Smith’s senior partner Michael Snyder launches a ferocious attack on industry regulation this week in a piece in Accountancy Age, saying that tribunals have become ‘lawyer-dominated’ and do not contain enough input from auditors.