The Accountancy and Actuarial Discipline Board, a part of the Financial Reporting Council (FRC), today publishes a feedback statement on the changes being made to its Accountancy Scheme. The Board finalised its proposals following a wide-ranging review of the Accountancy Scheme, a public consultation and discussions with the professional bodies who participate in the Accountancy Scheme (the Participants).

The proposed changes are designed to uphold the principles of fairness, transparency and proportionality 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 being made to the Accountancy Scheme include:

• a change to the evidential test to be applied before a matter proceeds to a disciplinary tribunal and the introduction of a desirability test;
• new procedures to appoint tribunal and appeal tribunal members by an independent Convener;
• a new power to conduct preliminary enquiries, subject to an agreed protocol, before making a decision to investigate;
• restriction of the tribunal’s discretion to award costs against the Board to circumstances where the AADB is found to have acted “unreasonably”; and
• changes to the tribunal’s voting arrangements.

The Accountancy Scheme requires the agreement of the Participants and of the FRC to any changes. The Participants have agreed to recommend the changes to their governing bodies.

Timothy Walker, Chairman of the AADB, said:

“The changes we are making demonstrate the Board’s commitment to the principles of independence, fairness and transparency in its disciplinary arrangements. They are the result of extensive consultation with the Participants and others. We welcome the support of the Participants for these changes which we believe will further strengthen the disciplinary process in public interest cases. We anticipate the changes will come into effect in January 2010 at the latest”.

The feedback statement, ‘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 FRC Board. The Committee on Corporate Governance assists the Board in its work 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 covered by the Scheme 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.org.uk.