Earlier this year, the Financial Reporting Council, which oversees the
activities of the
AADB, said it would
take legal advice relating to how its disciplinary arm would continue to
function, in the event of large cost awards made against it.
The FRC took legal advice following the then Accountancy Investigation and
Discipline Board’s major defeat at its first tribunal – a case involving bus
manufacturer Mayflower and its auditors PricewaterhouseCoopers – which saw a
£987,000 cost award made against it by an independent tribunal.
The tribunal dismissed complaints against Mayflower’s finance director David
Donnelly and PwC and ordered the FRC to pay £400,000 towards PwC’s costs and
£587,500 towards Donnelly’s costs.
At the time, FRC chief executive Paul Boyle said the regulator was less
likely to bring complaints if the rules remained as they are.
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