It was not a result the profession's regulator had hoped for, but the war of words that erupted after publication of the Mayflower tribunal's findings will have added insult to injury. And to make matters worse, there is now an outstanding bill of nearly £1m to cover the defendants' costs.

In January, the Accountancy Investigation & Discipline Board published the findings of the disciplinary tribunal that heard complaints against PricewaterhouseCoopers, David Donnelly and Ian Shelton over their conduct leading up to the financial scandal at engineering group Mayflower. PwC was the auditor and Donnelly the de facto finance director of the company, which collapsed following the discovery of financial irregularities at one of its subsidiaries, the bus maker Transbus. Shelton was the financial controller at the bus maker.

The results of the tribunal made awkward reading for the AIDB, as this was its first case, heard in public, since its formation in 2004. Although Shelton was found to have fallen short of the standards required of an ACCA member, both PwC and Donnelly were cleared of any complaints.

But it was the manner in which the tribunal's findings were published, and in particular the devastating attack on one of the AIDB's key expert witnesses, that has caused many eyebrows to be raised. And the affair raises serious issues in the way the AIDB carries out future investigations, not to mention the costs of such probes - so much so that the AIDB's parent body, the Financial Reporting Council, will be reviewing the case to see what lessons should be learnt from the process.

The fact that the tribunal's findings have been published emphasises the regulator's commitment to transparency, but some feel it may have gone too far. Certainly, the tribunal could not be accused of pulling its punches with its criticisms of the AIDB's expert witness, Emile Woolf.

First, the tribunal said in its report that the best interests of the case had not been served by the AIDB using Woolf as its 'independent expert' since he had been closely involved in the investigation. As a consequence, the panel advised the AIDB to separate investigative and expert roles in future cases.

But the panel then also took the opportunity in its report to criticise the fact that Woolf had not been a finance director, and therefore his opinion of what a reasonably competent FD would do in certain circumstances was of limited assistance during the case.

The panel further noted errors in Woolf's report, inaccuracies in his verbal evidence and his failure to answer questions until directed by the panel chairman to do so.

Woolf's boss, Kingston Smith's senior partner Michael Snyder, has been quick to defend his head of forensic accounting. He believes the tribunal's attack on Woolf was 'quite outrageous'. He says: 'The system is flawed - findings should not be critical of witnesses. They could have said they heard the witness but disagreed with him, that would have been perfectly legitimate.' In particular, Snyder is concerned that factual inaccuracies were not corrected when the findings of the tribunal were circulated prior to publication. He says the inaccuracies were pointed out to the AIDB but they were not amended.

Paul Boyle, the FRC's chief executive, has defended the AIDB's position.

'The tribunal gives its judgment, and it is standard legal practice to give the judgment in advance to the relevant parties, but the tribunal's opinion is its opinion,' he says.

So will the treatment handed out to Woolf deter other professionals from offering their services as expert witnesses to the AIDB?

Apparently not; Cameron Scott, the AIDB's executive legal counsel says that forensic accountants have already been appointed to act in three out of the four current cases on his books, and a fourth is about to be appointed.

Nor will the result affect the future of these cases. 'We have got a job to do,' says Scott.

But this job costs money, something that is in short supply at the FRC and AIDB, especially when compared with the deep pockets of likely defendants.

With costs of nearly £1m being awarded to PwC and Donnelly, the FRC is at risk of breaking its budget. This is a situation that Boyle concedes gives rise to considerable concern. 'We are a very small organisation compared to many of those that we regulate,' says the FRC chief. 'It is not a good position to be in.'

To a certain extent, the profession and its regulator are in uncharted territory. Costs of investigations by the AIDB are reimbursed by the relevant institutes via the Consultative Committee of Accountancy Bodies - in this case the ICAEW and ACCA. But there is no fund to pay the costs of defendants if they are successful in defending their case. Under the previous system of disciplinary tribunals, defendants were not able to claim back costs from the Joint Disciplinary Scheme. This is not so for the AIDB, but Boyle admits there is no contingency fund to cover such costs.

So the regulator has found itself in an unequal bargaining situation, where it simply does not have the resources to match those of the bigger accountancy firms. But will this restrict the cases the AIDB takes on in the future? Boyle does not believe so. 'It is not right to only take on cases we are certain of winning,' he says. Boyle is determined that lessons should be learnt from the case, including whether it is appropriate to allow defendants to apply to have their costs paid by the AIDB if a tribunal throws out the disciplinary body's claims.

However, some believe there are more fundamental problems with the current system. One seasoned observer describes the current disciplinary procedure as 'very New Labour', arguing that the system looks more like 'a civil servant's solution rather than a business solution.' With regard to the make up of the tribunal, it has also been argued that allowing two QCs to sit on the tribunal is similar to having two cooks in the kitchen, a recipe for disaster. Tribunals set up under the JDS are formed of one QC and two experienced accountants, the AIDB's Mayflower tribunal was made up of two QCs, two accountants and one lay person - and it was the practising accountant who insisted on the publication of his dissenting opinion over PwC, an act that was seen as very telling by the likes of Kingston Smith's Michael Snyder.

Others argued that the AIDB should be separated from its parent body - this would emphasise its independence from both the regulator and the profession.

But clearly there are immediate lessons to be learnt from the tribunal process as it moves towards future cases. Currently the AIDB has four investigations on its books. These focus on the role of accountants and auditors at iSoft, MG Rover, Langbar International and Emerging Business Trust. And the AIDB's predecessor, the JDS, still has a number of cases under investigation - its case against Ernst & Young, the former auditor of Equitable Life, kicks off this month and is expected to last 10 weeks.

No doubt parallels will be drawn between the two; the JDS has only lost one case in its history, concerning a senior Deloitte partner's role over the scandal at Capital Corporation.

The AIDB will be hoping it will also be able to achieve a similar score sheet but it has not been the best start.