ICAEW defends retaining KPMG Silentnight fine
Silentnight pension holders stand to lose around 30% of their pot as a result of KMPG’s misconduct, but ICAEW insists the fine levied on the Big Four firm will not be used to compensate them.
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A fine is a fine
Not a redistribution of wealth
How else could ICAEW maintain its standard of living
Its the opacity of how the ICAEW utilises its funds (including those derived from fines) that leaves them looking shifty.
".. where fines have been imposed, many of the costs orders have not fully reimbursed .. the whole costs of the investigations” = understood if unquantified.
".. money from FRC fines is used to fund strategic projects that address public interest matters and support the development of the wider profession" = woolly obfuscation.
OK, they need funds to perform the investigations (whether these are as often or in-depth as they should be is a different matter) ... but without clarity in their expenditure, one is left with a sense that a lot of 'good times' are swept into the box labelled 'public interest matters'.
You can fund a fair bit of 'public interest matters' with £13.5 million from this one alone. Pass me the port...hic
Finding this kind of pseudo-criminal movement of funds hilarious, I try and look to the positive.
If it wasn't for self appointed NGOs and charities, the ordinary person may not be able to afford the latest design Range Rover for instance. Be thankful of them taking the hit on depreciation and powering the second hand car market.
I'm an a ACCA member rather than ICAEW so would not directly lose out from the great work the institute would not be able to do without the money (hmmm) but in this case I'd want the money to go to the normal people affected rather than the coffers. Professional bodies instruct us all about being moral and ethical in our dealings... this comes down to doing the right thing, not the legally required thing, the right thing. If it were not private individuals affected I wouldn't feel quite the same but in this case it is clear they need it more than ICAEW.
The ICAEW has recovered the costs in full and made a profit. It preaches ethics to others but is found wanting a again and again. The ICAEW's regulatory powers in every sphere need to end.
The regulation of insolvency is one of the biggest scams. At October 2020, some 7,962 business insolvencies had been running for the period of 5-9 years and were incomplete, the numbers running for 10-14 years and not completed were 3,642. 14,328 were running for more than 15 years, enabling IPs to milk them for exorbitant fees. There are no inquiries into delays or excessive fees. The long-suffering public can’t even demand information as the RPBs are excluded from the freedom of information law.
In the last 10 years, some 8,000 complaints about excesses of insolvency practitioners have been lodged with RPBs. Only five insolvency practitioners have had their licenses revoked. Self-regulation is a scam.
These are dark times for accountants especially auditors. A friend asked me the other day how accountant sleep at nights. I didn't have a ready answer.
These are dark times for accountants especially auditors. A friend asked me the other day how accountant sleep at nights. I didn't have a ready answer.
On a SilentNight mattress??
Too soon?
The correct question to ask is why, after 8 years the Silent Night trustees have not commenced and completed action against KPMG if they have a legitimate cause to do so?
Directors can be bad as well
The pension trustees have had years to sort this out and make valid claims
Absolutely tone deaf response. They have probably profited from the misdeeds of their members. Given the constant stream of negative press about poor quality audits here was a chance to be the good guys and create some much needed public goodwill.
"prompted the Institute to respond that it had not been gifted a “windfall” and that the costs of its investigations are rarely reclaimed."
Increase the fine to properly cover costs, increase it again to PENALISE the partners for their actions and repair the damage their actions facilitated, otherwise this is the police excusing the housebreaker not for house breaking but only for getting caught and causing the police to spend time and money investigating the crime
Surely there is some form of redress available that might see KPMG pursued for the loss of benefits owed to the pension fund members? I recognise I may be showing a degree of ignorance regarding regulations/law in these circumstances (i.e. Pension Protection Fund involvement). The apparently guilty party KPMG needs holding to account.
The problem is the rules are all wrong.
The ICAEW is within its legal rights.
But
The FRC has the power to order KPMG to reimburse the victim, rather than just levy a "Fine"
Second
It is the Persons in Substantial Control of the offender who should be directly penalised.
The fine is, if my arithmetic is correct, approximately,.0004 of KPMG's global income.
(US$32.13 billion)
That's US$0.40 per US$1000.fees
Just charge the clients for an extra cup of water.
It is a joke.
As in any court hearing, the guilty (Subject to mitigating circumstances) should be required to pay claimant's costs over and above any damages or restitution ordered.
The FRC should in law be obliged to take victim Restitution into account.
As should the ICAEW
flying pink pigs comes to mind.
No wonder Joe Public would prefer to employ non-qualified accountants rather than pay the exorbitant rates qualified firms charge especially when they behave like this. The accountancy profession used to be respected but has long since gone and been replaced with suspicion and contempt. The governing bodies seem quite happy for this to continue as long as they rake in "fees" like this.
If there is to be some restitution to be made to the pension trustees, then it is KPMG who should do so, not the Institute. The ICAEW is not a profit making body, and without the income from fines, then ICAEW members who would suffer the cost of regulation with no ability to place the cost on those of their members who have broken the rules. If the law of the land cannot hold KPMG to account for this, then it is not the Institute's fault. Prem Sikka thinks self regulation is a scam, but why was this put in place at all? The great and the good, of which he was one, should have devised a better system. However, if say the FCA, or the Bank of England or whoever, were the regulator, would it make any difference? They would still have to collect the fines to pay for the regulation.
I know the law is an [***] and the small guy stands no chance up against multi nationals, but why don't the pensioners sue KPMG.
( I may have answered my own question there).
In reply to comments
(been there, worn the T-shirt)
Yes the pensioners could sue.
But
1) You have to precisely define the person responsible for your loss
Pensioneer Trustees or KPMG?
[***] up an audit is not responsibility for a loss, it is responsibility for not detecting the loss, but that is a post-event happening.
2) You have to quantify your loss-exactly quantify.
There is no legal aid in these matters.
so, unless you have access to a six figure sum for fees, forget it.
The law is there, but except and unless you are a billionaire, forget it.
As an ICAEW member it did seem that we should not profit from this situation. However, since 2004 what costs have ICAEW funded, and what income via fines have they recouped. Are they profiteering or are they covering costs, or somewhere in between. Looking at one case on 18 years is in no way a good sample. As a member, I don't want to profit from pensioners, but I also don't want to fund bad behaviour of others. Simple solution. ICAEW should state the total amount funded, and the total amount recouped. Then everyone can be informed and opine accordingly.