Call on 0844 2722322

Direct Access and Referral Barrister.
at St Pauls Chambers, Leeds & Gough Square Chambers, London

The AADB transfers to FRC Conduct and Case Committees

After 4 years as a board member, Jeremy Barnett and two other long standing board members, James Gemmell and Graham Aslet, have left the Accountancy and Actuarial Disciplinary Board, the independent disciplinary board for accountants, accountancy firms and actuaries in the UK. The AADB has transferred the operation of it’s scheme to the FRC from 18th October 2012, to be operated by the Conduct Committee.

 

Background 

The Executive Counsel and his team conduct the investigations. He decides whether or not any accountant or accountancy firm or actuary should be subject to disciplinary proceedings and in making this decision acts independently. The running expenses of the AADB are funded by the professional bodies. Case costs are funded by the professional bodies whose members are involved.

The AADB has been in operation since May 2004, operating the scheme covering members of the six professional accountancy bodies. The Actuarial scheme has been in operation since September 2007.  The AADB deals with cases which raise important issues affecting the public interest in the UK and need to be investigated to determine whether or not there has been any misconduct by and accountant or accountancy firm or by an actuary.

Recent Cases

The AADB has a busy caseload, with a great deal of publicity for the recent decision in the cases of JP Morgan, where PwC were fined recently fined £1.4m for misconduct in the audit concerning failure by the bank to segregate client funds.    

This followed the announcement on 23November 2011 of the hearing against RSM Robson Rhodes and one of its partners in relation to the audits of Isoft Group PLC from 2003 – 5. Mr Williams and the firm admitted that their conduct had fallen short of that expected. The firm was fined £225,000 and ordered to pay £750,000 costs and Mr Williams was reprimanded and ordered to pay a fine of £15,000.

On April 3 2012 Mr Stuart Pearson, a member of the ICAEW, former chief executive of AIM listed investment services company Langbar International Limited admitted before a tribunal that his conduct in promoting the company to investors amounted to misconduct. He was excluded for a period of 5 years with immediate effect and was ordered to pay £20,000 towards the AADB costs.

In June 2012 the AADB concluded that, following an 18 month investigation, no action should be taken against Ernst & Young in respect of the use of Repo 108  by Lehman Brothers, that had been criticised by the US investigator Anton Valukas. Executive Counsel Gareth Rees QC considered that ‘there was no realistic prospect that a tribunal would make an adverse finding against E & Y in the UK, or members within that firm’.

The AADB has scheduled a number of tribunal hearings and continues to investigate further cases of alleged misconduct.

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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