A FORMER Haines Watts office managing director has been excluded from ICAEW membership for three years over audit work at Worthington Nicholls.
An independent tribunal of the Financial Reporting Council found 35 findings of misconduct against Paul Newsham in relation to the audit of the financial statements of Worthington Nicholls and its predecessor businesses in 2005 and 2006, plus an interim statement, prior to its AIM admission in June 2006.
Newsham, who was formerly listed as senior partner on Haines Watts Preston’s website, is now described as a “consultant to the firm”.
The tribunal also stated that it was “troubled” by the length of time it took for the case to be heard. Newsham was informed he was under investigation in April 2009. It took a further four years before the formal complaint was served as a further year for the tribunal hearing.
In relation to Sixonethreeone (a former Haines Watts unit known as ‘HWCA’ that entered into a CVA), a settlement was agreed. HWCA admitted that its conduct fell “significantly short” of the standards reasonably expected of a member firm in respect of the allegations of misconduct. HWCA agreed to a £225,000 fine and paid costs of £225,000 as a contribution to executive counsel’s costs.
Paul George, FRC executive director of conduct, said: “It is essential that investors in smaller listed and AIM companies are able to rely upon the audited accounts of such companies in informing their investment decisions. In this case breaches of auditing standards of fundamental importance, in particular in relation to the audit of the accounting for revenue and costs on long term contracts, had a real impact on the reliability of the financial statements at a critical stage of the company’s history, and on investors’ decisions.
“As the UK’s lead audit regulator, these outcomes demonstrate the FRC’s commitment to upholding the rigorous application of auditing standards and ensuring public and market confidence in the standards of professional practice.”
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