ADMISSIONS AND LICENSING COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

Transcription

1 ADMISSIONS AND LICENSING COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mrs Mary O'Loughlin FCCA Heard on: Thursday 24 September 2015 Location: Committee: Legal Adviser: ACCA offices, 29 Lincoln's Inn Fields, London WC2A 3EE Mr Mike Cann (Chair, Lay), Mr Trevor Salmon (Accountant) and Mr Robin Hay (Lay) Mr Leighton Hughes Persons present and capacity: Ms Alex Mills Case Presenter) Mr Imran Alli (Committee Officer) Observers: None INTRODUCTION 1. The Committee had before it a substantive bundle of papers numbering pages 1-22 together with an additional bundle numbering pages In addition the Committee had sight of a service bundle numbering pages ACCA was represented by Mr Mills. Mrs O'Loughlin was neither present nor was represented. SERVICE AND PROCEEDING IN ABSENCE 3. Mrs O'Loughlin was sent the notice of hearing and hearing bundle on 28 August The Royal Mail Track and Trace service establishes

2 that the documents were delivered on 3 September Mrs O'Louhghlin wrote to ACCA on 9 September 2015, acknowledging the documents that she had received and stating "I confirm that I will not be attending the meeting and will not seek representation at the meeting." 4. The Committee decided that Mrs O'Loughlin had been properly served with the notice and case papers in accordance with the Chartered Certified Accountants Authorisation Regulations 2014 (AR) Regulations 6(1) and The Committee went on to consider whether to proceed in the absence of Mrs O'Loughlin. It took into account her letter of 9 September 2015 and the Committee bore in mind that this letter was written in the knowledge of the orders sought by ACCA at this hearing, as set out at page 22 of the hearing bundle. 6. The Committee decided that no useful purpose would be served by adjourning the case as Mrs O'Loughlin had not sought an adjournment of today's hearing and there was no reason to believe that she would attend at a later date. 7. Accordingly the Committee decided that Mrs O'Loughlin had waived her right to attend by voluntarily absenting herself and concluded that it would proceed in her absence, in accordance with AR 6(6). BRIEF BACKGROUND 8. O'Loughlin & Co ("the firm") is the sole practice of ACCA member, Mrs M E O'Loughlin. 9. On 19 March 2013 the firm was the subject of a monitoring visit. The purpose of monitoring visits is to enable ACCA to reach a view on the overall standard of the audit work of a firm. Following that visit the

3 compliance officer informed Mrs O'Loughlin of serious deficiencies in the firm's audit work which had resulted in audit opinions not being adequately supported by the work performed and recorded. The report on the visit set out these deficiencies and was sent to the firm on 22 April It contained guidance on how the firm might remedy the deficiencies found. 10. On 12 May 2015 the compliance officer paid a further monitoring visit to the firm. The purpose of that visit was to follow up on the previous visit, to confirm the firms' eligibility for registered auditor status and to monitor compliance with the Chartered Certified Accountants' Global Practising Regulations During the visit on 12 May 2015 the compliance officer found that the firm had made no effective improvement to its procedures since The complete details of the failings identified at that visit are set out at paragraphs 2.2 to 2.12 of the hearing bundle. 11. Mr Mills submitted that the following facts were relevant to the Committee's considerations: i ii iii iv. v The firm and its audit principal (Mrs O'Loughlin) have had two monitoring visits; Both visits had unsatisfactory outcomes; At the second visit there was no improvement to the standard of audit work and not only did many of the deficiencies reported at the first visit remain, but further significant errors and deficiencies were identified; The firm has failed to achieve a satisfactory outcome in spite of the advice and warning given at the previous visit The firm has made little or no attempt to comply with auditing standards and the audit work was generally very poor.

4 12. In the light of the fact that Mrs O'Loughlin has relinquished her audit qualification and the audit registration for her firm prior to this hearing, Mr Millls drew the Committee's attention to GRO Guideline Order B14 and invited it to make an appropriate order imposing conditions upon any future re-application for audit registration by Mrs O'Loughlin. DECISION ON APPLICATION AND REASONS 13. The Committee accepted the advice of the Legal Advisor. 14. The Committee acknowledged that Mrs O'Loughlin has relinquished her audit qualification and the audit registration for her firm prior to this hearing. Accordingly, the remaining issue for the Committee to consider today was whether it was appropriate to make a consequential order pursuant to AR 6(18) specifying that no future application for a certificate with audit qualification may be entertained for a specified period or until the occurrence of a specified event. 15. The purpose of monitoring visits is to reach a view on the overall standard of the audit work of a firm. The deficiencies identified in the course of the second monitoring visit were extensive and serious. The purpose of orders made by the Admissions and Licensing Committee is to protect the public interest, maintain public confidence in the profession and maintain proper standards of conduct. The Committee accepted Mr Mill's summary of facts at paragraph 11 (i) to (v) above as representing powerful reasons to make an order imposing conditions upon any future application by Mrs O'Loughlin for a certificate with audit qualification. 16. Accordingly, the Committee made an order pursuant to AR(18) that any future re-application for audit registration by Mrs O'Loughlin, or by a firm in which she is a principal, must be referred to the Admissions and Licensing Committee, which will not consider the application until she has attended a practical audit course, approved by ACCA and,

5 following the date of this order, passed paper P7, Advanced Audit and Assurance, of ACCA s professional examinations. PUBLICITY 17. AR 6(12)(c)(vi) provides that, where a member has relinquished her certificate before the hearing, as it the case here, details of that fact and any consequential orders made by the Committee shall be published as the Committee thinks fit, provided that if the relevant person is not named they shall not be sent to any publications local to the relevant person s place of business or residence. 18. The hearing bundle that was served on Mrs O'Loughlin notified her of the Committee's power to direct the publicity of any orders made at this hearing. Mrs O'Loughlin has not made any representations on the issue of publicity, 19. The Committee ordered that a news release be issued to ACCA s website and to the local press as soon as practicable, referring to Mrs O'Loughlin and her firm by name. The Committee considers that it is important that any publication makes it clear that Mrs O Loughlin retains her membership of ACCA and her practising certificate and that this order only relates to Mrs O'Loughlin's ability to act as a Registered Statutory Auditor. Mr Mike Cann Chairman 24 September 2015