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Haines Watts fined £45,000 over unqualified audit reports


Haines Watts Leeds LLP has been severely reprimanded and fined a total of £45,000 by the ICAEW Investigation Committee this month.

28th Jan 2021
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Haines Watts Leeds agreed to the fine and accepted responsibility.

This instance occurred after the firm issued an Accountant’s Report confirming that their loan arrangement fees had been paid in accordance with certain agreements, when the opposite was true.

The accountancy firm reportedly signed unqualified audit reports during November 2011, December 2012, and April 2014, which proved to have not been conducted in accordance with international audit standards.

Chris Cope, consultant to Blake Morgan LLP, comments:

There were also costs of £11,251 making a total liability of £56,251. The Accountant’s Report on the first complaint was dated 15 th December 2011. The audit reports on the second, third and fourth complaints were dated November 2011, December 2012 and April 2014 respectively. It would be very useful were the press release to explain why it is only now that these very historic matters have been concluded. The two oldest complaints date from late 2011, over nine years ago.

Reports of reports

ICAEW’s disciplinaries this month have been packed with several other cases of unqualified audits, including a fine of £5,000 on PKF Littlejohn London LLP. The Committee found the firm in breach of International Financial Reporting Standards when signing an unqualified audit report.

Other individuals who were fined for breaching ethical and/or auditing standards include John Edwards and Gary Woodhall. They each incurred a liability of £1,750 together with a reprimand.

Chris Cope, consultant to Blake Morgan LLP, comments:

When assessing the appropriate sanction in an audit-related matter, the Investigation Committee or Disciplinary Tribunal must take into account the following:-

  1. The gravity and duration of the offence.
  2. The individual’s degree of responsibility.
  3. The Respondent’s financial status.
  4. Any profits gained or losses avoided.
  5. The Respondent’s cooperation.
  6. Previous adverse findings.

(4) would enable the audit fee to be considered.

No accounting for quarantine

January’s disciplinaries also saw an ICAEW member, Maxime David, reprimanded after failing to self-isolate. This was a Jersey case of a breach of Covid regulations.

Many have been struggling with the up and down government guidelines throughout the pandemic, and accountants are no exception; the perpetual plague of being forced to stay inside, although necessary, has undoubtedly affected the mental health of thousands across the world over the course of the past year.

Although this accountant was found to be breaching the rules and regulations of lockdown, many in the profession have debated whether accounting bodies such as the ICAEW should have such involvement in what their members do outside office hours.

“The real issue seems to me to be whether the ICAEW is giving an appropriate message to the public when it decides [to] bring the profession into dispute,” argued member maasrw of the previous month’s disciplinary reports.

The relevancy of accountants’ personal lives to reprimands such as this has been widely questioned. Whilst adhering to government guidelines and not causing harm to others is of utmost importance, and should be sanctioned accordingly if ignored, many have claimed that such instances of misconduct do not reflect on the accounting profession as a whole, as is suggested by certain institutional reprimands.

What’s your opinion of accounting bodies’ involvement in the personal lives of accountants? Do you agree that they deserve to be a part of it? Share your thoughts in the comments below.


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