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PwC probed as audit partner lined up for ICAEW presidency

INCOMING ICAEW president Andrew Ratcliffe was responsible for signing off on the accounts of Barclays during a period now under investigation by the UK accounting watchdog.

Ratcliffe, set to become ICAEW president in June 2015, was the lead audit engagement partner for work carried out by PwC at Barclays Bank, during a period that is now being investigated by the Financial Reporting Council (FRC).

In its capacity as Barclays’ auditors between 2007 and 2011, PwC is being scrutinised by the FRC in relation to its role in reporting to the then financial services watchdog Financial Services Authority (FSA) on the bank’s compliance with the FSA’s client asset rules. Barclays was fined £38m by the Financial Conduct Authority in September for failing to correctly protect £16.5bn of its client’s assets.

Ratcliffe was responsible for signing off the bank’s accounts rather than being specifically engaged with the bank’s compliance with FSA rules. There is no suggestion of any misconduct on his part, and neither is he being personally investigated by the FRC, however, his role as audit lead responsible for Barclays between 2010 and 2014 could prove distracting during his presidency if the investigation continues, or a tribunal hearing is announced when he is in the ICAEW role.

An ICAEW spokesman said: “The FRC’s investigation relates to work undertaken by PwC in relation to its role in reporting to the FSA on the bank’s compliance with the FSA’s client asset rules. Andrew Ratcliffe was not the audit partner for this work and is not a subject of the FRC’s investigation.”

The FRC is attempting to speed up its investigation process, in the context of many lasting up to 12 months or more. The length of the process relies on the complexity of the case and the level of cooperation from the parties involved.

In December last year, the FRC scrapped an investigation into PwC’s conduct as auditors of Barclays Capital Securities after it deemed it unlikely that it would win a tribunal against the firm.

Launched in 2011, the investigation was concerned with the role of PwC in relation to the preparation of reports to the FSA in respect of Barclays Capital Securities’ compliance with the FSA’s Client Asset Rules for the periods from 1 December 2001 to 29 December 2009.

In 2008, ICAEW’s then incoming president Graham Durgan was forced to step down after revelations published by Accountancy Age that his company EWI had been awarded recommended supplier status by the institute. Insiders claimed the move was unprecedented in the ICAEW’s history.

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