ICAEW’s disciplinary process criticised

The ICAEW has been slated for the inconsistency of its disciplinary process.

Keith Train, MD of top 30 firm the DTE Group, said the institute was
hammering firms for ‘technical offences’ while allowing members guilty of
serious crimes to retain membership and face small financial penalties.

Several major firms have recently received fines over audits. Last week,
Horwath Clark Whitehill received a £2,500 fine for improper procedures in
carrying out a share valuation for a client.

Bentley Jennison also received a fine last month for not qualifying an audit
over valuations of goodwill, tangible fixed assets and a directors’ loan
account, while Deloitte and KPMG both agreed to fines early this year for a
property valuation issue and an understatement of amounts owed to trade
creditors respectively.

Train highlighted two other recent disciplinaries, where one member had
killed someone while drink driving, and another convicted of a child porn
offence: both retained their memberships and were fined less than £1,000.

‘Most of these firms have simply failed in their efforts to cope with a
myriad of rules and regulations and have been hammered for their mistakes,’ said

‘While I appreciate that the two members [found guilty in the courts] will
have been punished by English law, the disparity in the fines send out confusing
signals and underline a lunacy in the disciplinary committee’s policy on

Train added that the fines were ‘out of proportion’.

The ICAEW vigorously defended the actions taken by its committees.

Vernon Soare, ICAEW executive director, professional standards directorate,
said its conduct committees made their decisions independently of the institute,
and carefully considered a wide range of circumstances related to each case.

‘There are no tariffs,’ said Soare.

‘These were complex cases. They have already gone through the legal system.
We do have a responsibility for the conduct of our members – and how it will
reflect their standings as an accountant. ‘The committee will take on board all
relevant facts. We issue a brief synopsis of the case [to the public],’ Soare

He said that where there was a prima facie minor case against a member, the
institute would often issue unpublicised cautions.

One-third of people sitting on the conduct committees were from outside the
profession, and they also chaired them.

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