The Accountancy and Actuarial Discipline Board, a part of the Financial Reporting C,ouncil (FRC), today publishes a consultation document on the changes it is proposing for its Accountancy Scheme. The Board developed its proposals following a wide-ranging review of the Accountancy Scheme.

The proposed changes are designed to uphold the principles of fairness, transparency and proportionality, which are considered to be the hallmarks of effective, independent regulation and to ensure the continued provision of a “demonstrably fair, independent and expert system for investigating and, where appropriate, hearing significant public interest disciplinary cases” (AADB Aims and Objectives).

Key changes proposed by the Board include:

• A change to the definition of conduct subject to disciplinary action and the replacement of “misconduct” with the term “Relevant Conduct”;
• a new power to conduct preliminary enquiries before making a decision to investigate;
• changes to the procedures relating to the decision to lay complaints, including the formation of a Disciplinary Decisions Committee (DDC);
• a two-tier test to be applied by the DDC before a matter proceeds to a disciplinary tribunal – an evidential test and a desirability test;
• new procedures to appoint tribunal and appeal tribunal members by an independent Convener; and
• restriction of the tribunal’s discretion to award costs against the Board to circumstances where there has been “misfeasance” on the part of Executive Counsel, the DDC or any person engaged to assist with the investigation or tribunal.

The Accountancy Scheme requires the agreement of the accountancy bodies (the Participants) who participate and of the FRC to any changes.

Mike Fogden, Chairman of the AADB, said:

“The proposed changes demonstrate the Board’s commitment to the principles of independence, fairness and transparency in its disciplinary arrangements. They are the result of an extensive review of the Accountancy Scheme. The Board is confident that the changes it is proposing will further strengthen the disciplinary process in public interest cases. The Board will now be discussing its proposals with interested parties, particularly the Participants”.

Responses to the consultation are requested by 11 April 2008.

The consultation document, ‘The Accountancy Scheme Review’, and draft amended Scheme are available on the AADB website at: http://www.frc.org.uk/aadb/publications/.

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy & Actuarial Discipline Board) and by the Committee on Corporate Governance.
2. The Accountancy and Actuarial Discipline Board ("AADB") is the independent, investigative and disciplinary body for accountants and actuaries in the UK. The AADB is responsible for operating and administering independent disciplinary schemes. The Accountancy Scheme covers Members of the following accountants' professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy, the Institute of Chartered Accountants in Ireland, the Institute of Chartered Accountants of Scotland and the Institute of Chartered Accountants in England and Wales. The Actuarial Scheme covers Members of the Institute of Actuaries and the Faculty of Actuaries in Scotland.
3. The focus of the AADB is on cases which raise important issues affecting the public interest; other disciplinary cases will continue to be dealt with by the relevant professional body. The purpose of an investigation is to determine whether there is evidence of misconduct on the part of Members or Member Firms of the professional bodies. An investigation does not always mean that an allegation has been made or that there is evidence of misconduct on the part of the Member or Member Firm involved.
4. Disciplinary Complaints filed following an AADB investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a Complaint, there is a wide range of sanctions which it can impose including an unlimited fine, exclusion from membership of a professional body and withdrawal of practising certificates or licenses.
5. All Press enquires should be directed to: Anna Colban, Secretary to the Board, on telephone: 020 7492 2451 or email: a.colban@frc-aadb.org.uk.