UK’s audit sector trade bodies would not object to giving Big Four fines to the government
Two of the UK’s biggest audit industry trade bodies have said they would welcome any plans to see money raised through fines against auditors given over to the UK government, in order to fund Britain’s regulatory bodies.
The Institute of Chartered Accountants in England and Wales (ICAEW) and Association of Chartered Certified Accountants (ACCA) both told City PM they would be happy to give the millions reaped through fines against the Big Four accountancy firms to the Treasury, instead of taking them in themselves.
The comments come amid outrage over news the ICAEW is set to receive the entire £14.4m sum paid out by KPMG over misconduct during its audit of collapsed construction contractor Carillion.
Critics said the ICAEW is set to “profit” from KPMG’s misconduct, after a group of its auditors were found to have misled the UK’s accounting watchdog by forging documents during an investigation.
However, an ICAEW spokesperson told City PM it does not believe “any of the professional bodies would object to being removed entirely from the funding process,” as it said it is open to plans for “all fines in future going to HM Treasury.”
“We would be happy to discuss this with BEIS, the FRC or – when it is eventually established – ARGA,” the ICAEW spokesperson said.
The comments come as the UK’s big accountancy firms have paid millions in fines to the FRC following a series of audit scandals involving Britain’s major companies, including construction giant Kier and café chain Patisserie Valerie.
Speaking to City PM a spokesperson for the ACCA also said the body has always held the view that “no organization should ‘profit’ from fines levied by the FRC,” as it argued money raised should be used to fund enforcement activity.
The spokesperson added that “ACCA is not wedded to the current system where amounts are remitted to professional bodies,” as they said the body “absolutely understand the concerns being expressed around current arrangements.”
The ACCA spokesperson added that the “broader agenda for reform of the regulatory system provides an opportunity for this to be addressed.”
The comments come after the UK government set out plans to shakeup the audit sector, by replacing the FRC with a new body, called the Audit, Reporting and Governance Authority (ARGA), and forcing the Big Four accountancy firms to share major audits with smaller challenger firms.