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: Mr Sohail Farooq Chaudhry FCCA Firm Rass: Mian Heard on: Friday 5 February 2016, Wednesday 6 April 2016 and Thursday 7 April 2016, Friday 29 July 2016 Location: 12 Bloomsbury Square, London WC1A 2LP - 5 February 2016 The Adelphi, 1 11 John Adam Street, London W62N 6AU 6 and 7 April 2016 and 29 July 2016 Committee: Mr Graham White (Chair) Ms Ruby Sukkersudha (Accountant) Ms Kate Menin (Lay) Legal Adviser: Mrs Fiona Barnett Persons present and capacity: Mr Sohail Chaudhry Member 5 February, 6 and 7 April 2016, 29 July Mr Kasir Ahmed ACCA Case Presenter 5 February, 6 and 7 April 2016, 29 July Mr Mohammed Ismail ACCA Case Presenter 29 July 2016 Mr Richard Lorkin Hearings Officer 5 February, 6 and 7 April 2016, 29 July Mr Imran Benson Counsel for Mr Chaudhry 29 July 2016 Ms Sophie Lipton Legal Representative for Mr Chaudhury 29 July 2016

2 Observers: Mr Maurice Cohen 5 February 2016 Mrs Kathryn Douglas 5 February 2016 Mr Rob Mukherjee ACCA Compliance Manager 5 February 2016 Mr Lee Pritchard ACCA Regulation Officer 6 April 2016 Mr Alan Kershaw Member ACCA Appointments Board 29 July 2016 APPLICATION AND BRIEF BACKGROUND 1. The Committee considered an application by ACCA, inviting it to remove the Firm s audit certificate and Mr Chaudhry s practising certificate with audit qualification. 2. The Committee had before it a bundle with papers numbering pages 1 219, and additional papers numbering pages and Pages were tabled on 5 February Pages , and were tabled on 6 April The Committee also had Service Bundles numbering pages 1 17, and In advance of the hearing on 29 July 2016, the Committee was provided with a bundle of additional papers numbering pages , an adjournment bundle numbering pages 1 14 and a further service bundle with pages numbering Rass: Mian ( the Firm ) is the sole practice of Mr Chaudhry. 5. The Firm had its first audit monitoring visit on 22 February The ACCA Compliance Officer found that the Firm s audit work was of a satisfactory standard, however some deficiencies were found. A report containing guidance on how to improve its audit work was sent to the Firm in March The second monitoring visit was carried out on 7 February The Compliance Officer found that there were serious deficiencies in the Firm s audit work. These were set out in a report dated 19 February 2013 which contained guidance on how the Firm might remedy the deficiencies. The Firm provided detailed responses on 7 and 30 May The third monitoring visit took place on 12 February The purpose of the visit was, in part, to ensure that the Firm had remedied the deficiencies identified at the

3 previous monitoring visit. The Firm has one charity client which requires an audit and this file was inspected. The Compliance Officer (Miss Chohan), found that the Firm had made little effective improvement to its procedures. She found that the Firm had used a standard audit programme but had not tailored this to meet the needs of the particular audit client. She concluded that the audit opinion was not adequately supported by the work performed and recorded. EVIDENCE 8. Miss Chohan gave evidence to the Committee and confirmed the findings of her report. At the Committee s request, she provided it with the report from the earlier monitoring visit to the Firm in February Mr Chaudhry did not object to the admission of that report. 9. Mr Chaudhry also gave evidence to the Committee. He maintained that he had complied with the International Standards on Auditing (ISA) and that his written responses to ACCA were a fair representation of his current position. He conceded that in general terms there was some room for improvement and in some limited instances, matters could have been documented more clearly. He told the Committee that the Firm had purchased audit compliance software in 2013 to assist it in complying with ISA s. 10. During his evidence, Mr Chaudhry adduced further working papers from his client s audit file. Mr Ahmed did not object to this. Consequently, Miss Chohan was recalled so that she could comment on them. She confirmed that they did not affect her original findings or her earlier evidence to the Committee. DECISION ON FACTS AND REASONS 11. The Committee accepted the advice of the Legal Assessor. In particular, it accepted that as Mr Chaudhry had challenged every breach alleged within the report, it must make findings in relation to each of these. 12. In reaching its decisions, it reminded itself that the burden of proof rests with ACCA and the standard of proof is the civil standard, which is the balance of probabilities. The Committee had regard to all the oral and documentary evidence and the submissions before it.

4 International Standard on Quality Control ISQ1. Material breach found 13. Miss Chohan told the Committee that ISQ1 required an auditor to document quality control procedures under six headings and that ACCA had issued guidance to assist auditors with compliance. She said Mr Chaudhry had that guidance but had not tailored it for use by his Firm, which was a small firm. She said that the documents he had submitted to demonstrate compliance were checklists only and whilst these could assist, she maintained that he had not documented the Firm s quality control procedures. 14. Mr Chaudhry, in his written response, referred to audit documents, which he said documented the required procedures and demonstrated compliance. He accepted in oral evidence that he had not tailored the guidance for use by his firm, but said that this did not matter as the essence of the test for ISQ1 had been met. In answer to the criticism that he had not implemented procedures to monitor the standard of the audit work, he said he had a loose arrangement to exchange views with a colleague in another firm who is involved with a similar charity. 15. The Panel accepted Miss Chohan s evidence. It found that there was no evidence before it to show that Mr Chaudhry had documented the required procedures. He had also accepted he had not tailored ACCA s guidance for use by his Firm. It therefore found that he had breached the requirements of ISQC1, and that this was a material breach. Independence - APB Ethical Standard 4, paragraph 27. Material breach found 16. Miss Chohan explained that the audit client had not paid the Firm s audit fees for the year ended September 2012 by the time the Firm signed the audit for the year ended September She said Mr Chaudhry had not identified this potential threat to the Firm s independence. He had confirmed in the audit documentation that there were no conflicts, or threats to independence but she said there was no record on file that he had considered the potential threat at all.

5 17. Mr Chaudhry explained that there were unusual circumstances within the charity at that time; he adduced documents which demonstrated that the charity had not elected trustees for some years and the Charity Commission had intervened to ensure that interim trustees were appointed. He said he weighed any potential threat to independence from the lack of payment but concluded there was none. Mr Chaudhry accepted however, during his oral evidence, that he had not documented this in any precise way and that he had not shown his conclusion on the audit file as to why the non-payment of fees was not an independence issue. 18. Having considered Miss Chohan s evidence and the acceptance by Mr Chaudhry that he had not documented his conclusion and reasons why there was no threat to the Firm s independence, the Committee found that Mr Chaudhry had breached the requirements of Ethical Standard 4, and that it was a material breach. Communication with those charged with governance - ISA 260. Breach not proved 19. Miss Chohan s evidence was that Mr Chaudhry had not communicated to those charged with governance their responsibilities as auditors of the financial statements. In particular, the Firm had not provided an overview of the planned scope and timing of the audit or the auditors views about significant qualitative aspects of the client s accounting practices. Miss Chohan said that the planning letter adduced by Mr Chaudhry did not address all the key points required by ISA In his written response to ACCA, and in his oral evidence, Mr Chaudhry said he had communicated with those charged with governance as required by ISA 260. He referred the Committee to the audit planning letter and the management letter he had sent to the client. He told the Committee that he had taken the relevant checklist to the meeting with the trustees and completed this during the meeting. He produced his diary entry in support of his contention that he had met with the trustees on 19 August The Committee found that the documentary evidence relied upon by Mr Chaudhry was consistent with his contention that he had communicated his Firm s responsibilities as auditors to those charged with governance. It was evident that Mr Chaudhry had written to the trustees on 7 August 2014 enclosing two copies of the engagement letter for the audit. The engagement letter, which was signed by the

6 trustees on 14 August 2014, set out the Firm s responsibilities as auditors and details of the scope of the audit. Mr Chaudhry had followed this up with a meeting with the trustees on 19 August In the circumstances, the Committee accepted Mr Chaudhry s evidence on this issue, and did not find the alleged breach proved. Planning, control and documentation - ISA 315. Breach not proved 23. Miss Chohan told the Committee that this standard required the Firm to show its understanding of the key elements of the entity and its environment. She said that whilst there was background information on the file, there was insufficient information about the client s accounting systems. For example, there were no system notes about how donations to the charity were received and recorded. She told the Committee that none of the checklists referred to by Mr Chaudhry in correspondence fully explained the client s processes as required. 24. Mr Chaudhry told the Committee that he had complied with this ISA, and referred it to the Know your client checklist and the internal controls checklist. He explained that the internal controls checklist was conclusive and that any work done beyond completion of this would be stating the obvious. 25. The Committee considered the documents referred to by Mr Chaudhry. It noted that the internal controls checklist incorporated a conclusion, handwritten by Mr Chaudhry, which provided a step by step approach to how the accounting system worked for donations to the charity. The Committee therefore accepted Mr Chaudhry s evidence, and found that there was sufficient information about the client s accounting systems. This alleged breach was therefore not proved. Planning, control and documentation ISA 240 Material breach proved. 26. Miss Chohan s evidence was that there was no record on file that the Firm had made enquiries of management whether there had been any fraud within the entity; she said the Firm had not documented what procedures the management had established to identify or detect fraud, as required by ISA 240. Miss Chohan s opinion

7 was that checklists referred to by Mr Chaudhry in his written responses were the Firm s own assessment of fraud risk, but that the Firm had not understood the client s procedures for assessing the risk of fraud within the entity. She said the Firm had not documented that it had made enquiries and understood management s procedures, before concluding that the risk was low. 27. Mr Chaudhry initially said that he had complied with this ISA. He referred to a diary entry and the notes of the planning meeting which referred to fraud and fraud risk factors. He said he had discussed the risk of fraud with the trustees and emphasised to the Committee that he has knowledge of the client and that fraud has not previously been an issue. However, in cross-examination, he accepted that he should have put more work into documenting what was discussed at the meeting with the trustees about fraud. 28. Having considered Miss Chohan s evidence, and Mr Chaudhry s acceptance as set out above, the Committee found this breach proved, and found that it was a material breach of ISA 240. Planning, control and documentation ISA 300. Material breach proved. 29. Miss Chohan s evidence was that although the Firm had carried out some planning procedures, it had not established an overall audit strategy setting the scope, timing, and direction of the audit as required by ISA 300. She said the Firm had highlighted key areas of the audit but not recorded the nature of the testing required to obtain adequate audit evidence in those areas. In particular, it was not clear how the Firm planned to verify completeness of income and creditors. Miss Chohan explained that the documents produced by Mr Chaudhry showed what audit work had been done, but did not relate to the planning of the audit. 30. Mr Chaudhry referred the Committee to the Planning Memorandum which, he said, was extensive in every respect and was enough, of itself, to set aside any criticism. He said this document was generated by the Firm s audit software, which had been approved by ACCA, and that he followed this Memorandum in its entirety. 31. The Committee carefully examined the Planning Memorandum. It was clear that although Mr Chaudhry had completed it, he had not set out a comprehensive audit

8 strategy within the document. He had not indicated any lines of enquiry or named any individuals from whom he would seek information. The Committee also noted the paucity of information under the heading Strategy: General. 32. The Committee found that although Mr Chaudhry appeared to have a detailed understanding and knowledge of how his client operated, this was not the same as setting the strategy for the audit. He had not set out the scope, timing and direction of the audit, and it was unclear from the planning memorandum how he intended to verify the completeness of income and creditors. Mr Chaudhry referred the Committee to the documents entitled Bank receipts and payments audit work, (dated 9 September 2014) but the Committee s view was that this was a test working paper from the audit itself, and not evidence of pre planning strategy. The Committee also noted that Mr Chaudhry emphasised how he had followed the audit software programme comprehensively, which in his view meant that he had complied with the ISA, yet he had accepted during cross-examination that such programmes were only guides 33. The Committee therefore accepted Miss Chohan s evidence on this issue. It found that Mr Chohan had breached ISA 300, and that the breach was material. Planning control and documentation ISA 320 Breach not proved. 34. Miss Chohan told the Committee that the Firm had determined materiality for the financial statements as a whole, but had not determined an appropriate level of performance materiality. She said that for creditors and fixed assets, the Firm had kept its performance materiality at the same level as planning materiality, which is incorrect. She said that having lowered the level of materiality at the end of the audit, the Firm should have considered whether further audit procedures were required and if the Firm determined that they weren t, then this conclusion should have been recorded. 35. Mr Chaudhry, in his initial written response to ACCA, provided the relevant pages of the audit relating to materiality and said that the Firm did not consider any further audit work. In his evidence to the Committee, he drew its attention to documents entitled Determining Materiality and Materiality Summary.

9 36. The Committee accepted Mr Chaudhry s evidence on this issue. Having examined the documents, it found that he had provided justifications for his findings relating to materiality and was satisfied that he had carried out an appropriate method to determine materiality. It therefore did not find this alleged breach proved. Planning, control and documentation - ISA 230 Material breach proved. 37. Miss Chohan said that the Firm had not prepared adequate audit documentation to comply with this ISA. She said the documentation was not sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the nature, timing and extent of the audit procedures performed, so as to comply with the ISA s and applicable legal and regulatory requirements. The Firm had not always recorded the objectives and results of the audit procedures performed and the conclusions reached or any significant professional judgements made in reaching those conclusions. 38. In relation to an example from the audit file for bank receipts and payments, which had been referred to by Mr Chaudhry in his written response, Miss Chohan s opinion was that the methodology set out would not verify the stated objectives and that Mr Chaudhry had mixed transaction testing with control testing and completeness of income testing. She referred to schedules in the audit file where there was no record of what work was carried out. She confirmed in evidence that unless the work is documented, she is unable to see what has been done. 39. Mr Chaudhry responded to ACCA by saying that the Firm had complied with ISA 230 and that Miss Chohan s view was subjective. He said the audit file was full of audit tests, but that Miss Chohan had failed to see the audit trail. He said all the audit tests carried objectives, methodology and conclusions and showed dates and initials. He told the Committee that although Miss Chohan had said that everything needs a concluding paragraph, this can be superfluous if the auditor is complying with the ISA in the first place as the conclusions should be obvious from the audit papers. He said that if he had had more time during the monitoring visit, he could have explained to the Compliance Officer what he had done. 40. The Committee found that there was a lack of supporting documentation in the file, as described by Miss Chohan. In particular, it noted the Bank Receipts and

10 Payments Audit work where it was apparent that the methodology employed did not address the stated objectives. Mr Chaudhry had produced no evidence, either in his written representations to ACCA, in his oral evidence, or in the new documents adduced at the hearing, which would show otherwise. The Committee found Mr Chaudhry s assertion, that if he had had more time he could have explained to the Compliance Officer what he had done, to be significant, because it suggested a level of acceptance on his part that the audit file, of itself, was insufficient to explain matters to another experienced auditor. 41. The Committee therefore accepted Miss Chohan s evidence and found that Mr Chaudhry had breached ISA 230. It found that this was a material breach. Audit evidence ISA 500 Material breach found. 42. Miss Chohan told the Committee that there were a number of serious deficiencies in the extent and quality of audit evidence. Examples included: i. The Firm had not recorded how it had verified that creditors and accruals were complete. ii. The Firm had not verified the validity and completeness of interest free loans. iii. The Firm had not verified the completeness of donations and pledges income. She explained that the Firm should have checked why the client had not repaid loans and sought confirmation from lenders as to what was outstanding. iv. It was not evident that the Firm had assessed the validity of the charity s expenditure in relation to the client s stated objectives. A substantial proportion of expenditure comprised staff costs, but the Firm had not verified the existence of employees or the authorisation of gross pay rates. 43. In Mr Chaudhry s written response to ACCA, he referred to documents in support of his contention that he had complied and had applied all the procedures to verify completeness of income encompassing donations, pledges and other income. He acknowledged however that he had failed to bring a schedule forward into the 2013 audit file and that Miss Chohan had not seen a document which verified some of the loans to the client in 2013.

11 44. In relation to i above, Mr Chaudhry said, in cross-examination, that where donations are mostly cash and there are no invoices, the completeness issue becomes more of a validity issue. He accepted that it was wrong to take completeness out of the equation because the mosque was a place of worship. The Committee therefore found this alleged breach proved. 45. In relation to ii above, Mr Chaudhry accepted that completeness was slightly an issue in relation to interest free loans; he accepted that there was nothing on file to explain why he had dealt with an unsigned loan in the way that he had; he asserted that he had contacted the lender, but agreed there was nothing on file to show that he had. The Committee therefore found this alleged breach proved. 46. In relation to iii above, Mr Chaudhry referred the Committee to a schedule of donations and pledges. He told the Committee when cross-examined, that he had contacted almost all of the people on the schedule to verify these, but accepted that he did not actually have anything on file to demonstrate this. The Committee therefore found this alleged breach proved. 47. In relation to iv above, Mr Chaudhry told the Committee that he knew all the staff and met them on a regular basis. He accepted that the audit evidence documents (payslips etc) he had sent to ACCA related to 2015 and not the year of the audit because he had not been able to find the relevant documents for He said Miss Chohan had not looked in the PAYE file during the monitoring visit. He accepted during cross-examination that the explanation he had given to the Committee, (that he had not verified the existence of employees or authorised gross pay rates because he knew all the staff), was not an explanation he had written anywhere in the audit file. The Committee therefore found this alleged breach proved. 48. The Committee was satisfied that the breaches found in relation to points i to iv above were material breaches, both individually and collectively. Related parties ISA 550 Material breach found. 49. Miss Chohan told the Committee that at the planning stage, the auditor must identify the entity s related parties, recognise any associated fraud risks and the impact of these on the audit approach, and ensure any related parties are disclosed. She

12 confirmed that there was no record of any related parties at any stage, so it was not clear whether Mr Chaudhry had identified them. Her opinion was that documents submitted by Mr Chaudhry, such as the letter of representation, and the charity s membership list as at March 2014 did not demonstrate compliance with ISA 550. The membership list did not cover the period of the audit. 50. Mr Chaudhry asserted in his written response to ACCA that he had complied with this ISA; he referred to documents including a document from the audit software programme entitled related party transactions. In his evidence to the Committee, he referred to the Charity s Attendance Register and explained that he would crossreference invoices to names on the Attendance Register to ascertain if there were any related party transactions. Mr Chaudhry said in cross-examination that he then discussed the outcomes with the trustees in a meeting. He accepted that he had not made a record of that meeting; further, he accepted that although he had ticked the boxes on the related party transactions form to confirm that testing was required, there was no documentation on the file to demonstrate the nature of the testing he had carried out to identify any related parties. 51. The Committee also noted a letter, date stamped 6 November 2014 from the Charity client to the Firm, in which they had confirmed that there had been no related party transactions. In the Committee s view, this demonstrated that the client had raised such issue, yet the Firm had not subsequently verified it adequately within the file documented audit evidence. 52. Having considered Miss Chohan s evidence and Mr Chaudhry s responses in his evidence and cross-examination, the Committee found that the procedure described by Mr Chaudhry was inadequate to check for related party risk, and that it had not been recorded at all. It therefore found this alleged breach proved, and that it was a material breach. Subsequent events ISA 560 Material breach proved. 53. Miss Chohan told the Committee that the Firm had not performed adequate audit procedures designed to obtain sufficient, appropriate audit evidence that all events occurring between the year-end date of the financial statements and the date of the auditor s report that required adjustment of, or disclosure in, the financial statements

13 had been identified. Although the Firm had recorded that it had reviewed bank statements and the cash book, it had not recorded the extent and results of the review. Miss Chohan s opinion was that the subsequent events checklist referred to by Mr Chaudhry in his written response did not set out what records he had reviewed as part of his audit procedures. She confirmed that other documents to which he referred would not have helped him identify subsequent events. She said he had not recorded any discussions with the client regarding this. 54. In his written responses to ACCA, Mr Chaudhry referred to documents from the audit file including SUMMARY SHEET SUBSEQUENT EVENTS, GOING CONCERN CHECKLIST, and a comparison of 2012 and 2013 figures. He confirmed that these had been discussed in full with the client, but accepted that the comments should have been recorded on the audit file. 55. Mr Chaudhry told the Committee during his evidence and in cross-examination that he had discussed subsequent events with the clients at a meeting on 19 October He referred the Committee to the diary entry in support of his assertion that the meeting had taken place. He said that in view of the date the audit report had been signed, it was possible to infer that he had covered the subsequent events issue. He did however accept, that there was no note in the audit file of his meeting with the clients at which he said subsequent events had been discussed; further, he accepted that although the Firm had recorded that it had reviewed bank statements and the cash book, it had not recorded the extent and results of its review. 56. In view of the evidence of Miss Chohan and Mr Chaudhry s admissions, the Committee found that he had breached ISA 560 and that it was a material breach. CONCLUSION 57. In the light of its findings that Mr Chaudhury had committed seven material breaches of the ISAs and other regulations applicable to auditing standards, the Committee concluded that he had failed to comply with Global Practising Regulation 2003, regulation 18(1)(a).

14 SUBMISSIONS ON APPLICATION 58. Mr Ismail submitted that in view of the number and seriousness of the breaches of auditing standards committed by Mr Chaudhry, the Committee should withdraw Mr Chaudhry s practising certificate with audit qualification and the Firm s audit certificate. He submitted that Mr Chaudhry should be required to complete ACCA s Professional Courses audit workshop and also pass ACCA s P7 audit examination before any re-application. 59. Mr Benson informed the Committee that Mr Chaudhry had fully accepted the decision of the Committee. He said that this was the first occasion on which Mr Chaudhry had appeared before an ACCA Committee and that there had been no client or third party harm. He submitted that Mr Chaudhry was willing to improve his audit practice and that it would be appropriate and proportionate to impose conditions on the certificates. 60. Mr Chaudhry told the Committee that he unreservedly accepted the Committee s findings and explained the steps he has already taken to improve his audit practice. Mr Chaudhry set out in detail for the Committee the steps he now intends to take to ensure his audit practice complies with auditing standards in all respects where shortcomings have been identified. He explained that he was willing to attend ACCA s Professional Courses audit workshop this September and be subject to a further monitoring visit at his own expense. He also proposed that his audit files be hot reviewed. Mr Chaudhry produced a reference from one of the two Firms with whom he has a continuity of practice arrangement. He told the Committee that he now has two further audit clients and the loss of his audit certificate would have a devastating effect. COMMITTEE DECISION ON APPLICATION 61. In reaching its decision, the Committee took account of ACCA s document, Guidance for Regulatory Orders, Eligibility for certificates or licences and unsatisfactory outcomes to monitoring visits, updated November 2014, ( GRO ). It bore in mind that in determining what order to impose, if any, it must act proportionately, balancing Mr Chaudhry s interests against the purpose of regulatory orders.

15 62. The Committee was satisfied that it would be inappropriate to take no action. It determined that in view of its findings, an order was necessary for the protection of the public and to maintain public confidence in the profession and its standards of audit practice. 63. The Committee considered whether conditions could be formulated which would be appropriate, proportionate, workable and measurable and which would protect the public and meet the wider public interest. 64. It was clear to the Committee that Mr Chaudhry had reflected on the Committee s findings, now accepted his failings and had adopted a positive attitude towards improving his practice. Mr Chaudhry had put forward a detailed action plan as to how he intends to remedy all the deficiencies found and had shown a willingness to have all his audit work monitored in future. The Committee accepted Mr Chaudhry s submissions. It was satisfied that appropriate and proportionate conditions could be formulated which should meet the public interest and at the same time, allow Mr Chaudhry to continue with his audit work, whilst taking the necessary steps to improve his practice to an acceptable standard. ORDER 65. The Committee made an order pursuant to Authorisation Regulation 5(2)(f) that Mr Chaudhry and the Firm be required to: I. Provide Governance Practice Monitoring within 30 days of the date of written notification of this decision with a list of current audit clients, identifying any Public Interest Entity audits. II. Promptly notify Governance Practice Monitoring if the Firm accepts any new audit appointments or if any of the audit clients in I above cease to be an audit client at any time in the future while this decision remains in effect. III. Have all future audit work on all audit clients identified in I and II above reviewed by a training company before audit reports are signed, such training company being subject to ACCA approval.

16 IV. Notify ACCA of the identity of the training company referred to in III above within 14 days of provision to ACCA of the list of audit clients in accordance with I above. V. Submit all reports prepared by the nominated training company (including details of how the firm has addressed the points raised by the reviewer) pursuant to III above to Governance Practice Monitoring within seven days of signing the audit report. VI. Be subject to an accelerated monitoring visit before 18 months time at a cost to the Firm of 1000 and 400 for each additional audit qualified principal; and VII. Note that failure to make the necessary improvements in the level of compliance with auditing standards and with the requirements of any regulators by that time will jeopardise his and the Firm s continuing audit registration. 66. These conditions shall remain in force until 29 July EFFECTIVE DATE OF ORDER 67. The Committee determined that, in view of the nature and extent of the deficiencies identified in Mr Chaudhry s audit practice, it is in the interests of the public for the order to have immediate effect, pursuant to Regulation 9(2)(b) of the Authorisation Regulations Mr Graham White Chairman 29 July 2016