BDO, RAWLINSONS & MacIntyre Hudson have all been disciplined by the ICAEW according to the latest disciplinary papers.
All three firms were in breach of issues relating to audit standards and regulations, the disciplinary papers showed.
In BDO’s case the firm acted as auditor to a company in which a tax partner at BDO had a direct financial interest.
The partner acquired shares in the company in April 2008 under the Enterprise Investment Scheme which allows tax relief to be claimed if shares are held for three years. If shares are sold within this period no relief is available.
The partner then became a member of BDO when the firm he worked in, Chiltern, was acquired by BDO in September 2008.
BDO became auditor of that company in October 2008. When the discovery of the overlap was made, it was reported to BDO’s ethics partner. He decided the partner could continue to hold his shares until the qualifying tax relief period had ended – because the threat to audit independence was minimal for various reasons. The tax partner sold his shares in May 2011 after the qualifying period had lapsed.
However, the ICAEW disciplinary found that BDO should have required the partner to dispose of the shares as soon as it became aware of the issue. The ethics partner argued there was no threat to independence so an immediate sale was not necessary, also there are two other standards which were recently introduced which in a future similiar situation would mean that the shares would not have to be sold.
BDO were reprimanded £5,750 and ordered to pay costs of £4,462.
MacIntyre Hudson agreed to pay a penalty of £2,000 for breach of audit regulations because it failed to ensure that four members appointed in 2011 had appropriate affiliate status.
Meanwhile Rawlinsons was fined £1,000 for breach of audit regulations because it failed to guarantee that its corporate finance partner, recruited in 2010, had appropriate affiliate status.
As previously written by Accountancy Age, the ICAEW continues to reprimand accountants that are in financial difficulty.
Two members were ordered to pay £380 and £360 respectively for entering into an individual voluntary arrangement – which involves an insolvency practitioner consolidating debt and arranging for a percentage repayment over a contracted period of time.
The institute has also reprimanded an accountant £2,000 and ordered him to pay costs of £3,218 for being a director at a company which entered into a company voluntary arrangement – similar to an IVA but centred on a business.
Another accountant was reprimanded and ordered to pay costs of £480 for a similar issue.