Proposed FRC changes risky, warns ICAEW

The ICAEW has warned against the potential risks associated with the Financial Reporting Council's proposed change to its disciplinary scheme.

The accountancy body fears it could result in conduct matters being determined without effective accountability after the FRC consulted on its proposed changes which include a suggestion to remove the requirement to consult on recognised supervisory bodies.

Vernon Soare, ICAEW executive director, said: 'It is important that the professional bodies continue to play a role in the preliminary investigation of complaints which may lead to cases being taken by the FRC, as this can both add value to the process and lead to a more informed decision.

'Without a formal requirement for the FRC's new conduct committee to obtain consent on changes to the Accountancy Disciplinary Scheme or consult with the professional bodies concerning preliminary investigations, there is a danger that decisions on disciplinary matters will be taken by the FRC in isolation.'

The body says more evidence is required to justify the proposed changes, suggesting there are no tangible examples of delays caused to the disciplinary process as a result of consulting with professional bodies.

It also calls for a formal protocol for preliminary enquiries carried out by the FRC, saying it would provide both a clear criteria for FRC investigations and the steps needed following consultation with the relevant professional body.

Soare added: 'Professional conduct and disciplinary matters are a key part of ICAEW's work to uphold the standards of the profession. As the UK's largest recognised supervisory body, we are committed to continue collaborating with the FRC on the effective investigation and resolution of such cases.'

Responsibility for oversight and maintenance of disciplinary matters has been shifted from the Accountancy and Actuarial Discipline Board (AADB) to the FRC's Conduct Committee as part of the FRC's restructuring that came into force in July.

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