The Accountancy & Actuarial Discipline Board

Transcription

1 The Accountancy & Actuarial Discipline Board 1

2 The Financial Reporting Council Developing and enforcing Financial Reporting Standards Investigation & Discipline Statutory and non statutory oversight of accountancy and audit Developing audit standards and reviewing compliance & audit quality 2

3 AADB - Overview Accountancy and Actuarial Discipline Board (AADB) UK s independent investigative and disciplinary body for accountants and actuaries Responsible for operating and administering separate disciplinary schemes for the two professions 3

4 AADB Schemes Accountancy Scheme accountants / accountancy firms Actuarial Scheme individual actuaries only 4

5 AADB Accountancy Scheme covers accountants or accountancy firms who are members or member firms of one of participating accountancy bodies six participants: ACCA CIMA, CIPFA, ICAEW, ICAI, ICAS 5

6 AADB Legal Framework Schedule 10, Companies Act 2006 Participants recognised supervisory bodies (RSBs) must participate in appropriate independent arrangements for the carrying out of investigations into public interest cases arising in connection with the performance of statutory audit functions by members of the body in order to achieve supervisory body status AADB arrangements for independent investigation and/ or disciplinary hearings amount to appropriate independent arrangements 6

7 Links to other operating bodies Financial Reporting Review Panel (FRRP) reviews reports of listed and large private companies for compliance with the law and other reporting requirements and, where appropriate, seek corrective action from directors Professional Oversight Board (POB) provides statutory oversight of the regulation of auditing profession and independent oversight of the regulation of accountants and actuaries Audit Inspection Unit (AIU) part of POB, is responsible for monitoring of audits of all listed and other major public interest entities 7

8 AADB Legal Framework Members/Member Firms subject to rules and regulations of accountancy body of which they are members Primary responsibility for investigating and disciplining members rests with accountancy body which have their own disciplinary schemes AADB Scheme - separate disciplinary scheme for dealing with public interest cases only 8

9 Remit of AADB Scheme Grounds for an investigation matters which raise important issues affecting the public interest in the UK which need to be investigated to determine whether there has been an act of misconduct 9

10 Remit of AADB Scheme Public interest test serious public concern or damage to public confidence in the accountancy profession in the UK all the circumstances of the case including its nature, extent, scale and gravity 10

11 Remit of AADB Scheme Act of misconduct conduct which falls short of the standards reasonably to be expected of a Member or Member Firm 11

12 Taking on cases Two routes for cases to come to AADB call-in referral 12

13 Outline of process Referral by Participant /initiation of case by AADB Decision whether criteria in Scheme are met and matter should be dealt with by AADB Consultation with relevant Participant (for call-in only) Investigation Decision whether to bring disciplinary proceedings Tribunal hearing Appeal (if any) 13

14 AADB Structure Separation of Functions is key Board Board Secretary Executive Counsel Investigation team Tribunals Convener 14

15 Functions of Board Decides whether AADB will investigate Set scope of investigation Publicise AADB cases Set budgets Issue procedural guidance to Executive Counsel and others Make and amend Regulations Oversight of the arrangements 15

16 Functions of Executive Counsel Investigate matters referred by Board Exercise powers to obtain information from Participants/Members/Member Firms Decide whether to file complaint Report findings to Board Prosecute complaint 16

17 Case team Multi-disciplinary case team with legal, forensic and accountancy backgrounds Case team progresses cases under Executive Counsel s direction and supervision Where necessary, external advice is obtained on specialist legal or technical issues (Counsel, experts, forensic accountants) 17

18 TRIBUNALS Hear the complaint and decide whether it has been proved on the balance of probabilities Decide sanctions Decide whether to award costs against an unsuccessful respondent Decide whether to award costs against AADB, if found to have acted unreasonably 18

19 SANCTIONS Range of sanctions available to tribunal: Reprimand Unlimited fine Exclusion from membership Withdrawal of practising certificate, licence etc. 19

20 Relationship with other authorities AADB works with regulators, investigatory bodies, prosecuting authorities in UK and abroad, such as: Financial Services Authority (FSA) Serious Fraud Office (SFO) Companies Investigation Branch (CIB) of Department for Business, Innovation & Skills (BIS) The Pensions Regulator (TPR) US Securities and Exchange Commission (SEC) Statutory gateways for exchange of information 20

21 Relationship with other authorities AADB s jurisdiction limited to Members and Member Firms Disciplinary not criminal, leading sometimes to delay Civil standard of proof 21

22 Funding AADB core costs funded from FRC core operating costs FRC budget derived partly from small and diminishing government grant-in-aid funding and external funding via an annual levy from accountancy bodies, industry and users of audit services 22

23 Funding FRC core operating costs AADB receives 1.3 million 23

24 Funding AADB case costs disciplinary case costs: 1.7 million funded by relevant Participant under case costs agreement general principle costs should be borne by Participant whose Member/Member Firm is being investigated/ prosecuted case costs can be recovered from Member/Member Firm where an adverse finding is made 24

25 Summary Non-statutory, independent disciplinary body covering multiple participants Funded largely by the profession and users of accountants / auditors Low threshold for an investigation and power to take on cases itself Transparency of disciplinary process 25