The Financial Reporting Council’s (FRC) Executive Counsel has delivered a disciplinary Formal Complaint in connection with the conduct of:
Deloitte LLP (“Deloitte”) and Mr John Clennett in relation to the audits of the financial statements of Aero Inventory plc and its subsidiary Aero Inventory (UK) Limited for the years ended 30 June 2006, 2007 and 2008; and
Mr Hugh Bevan in relation to the preparation and approval of the financial statements of Aero Inventory plc and its subsidiary Aero Inventory (UK) Limited for the years ended 30 June 2006, 2007 and 2008.
All three respondents are members of the ICAEW.
The Complaint alleges that the conduct of Deloitte, Mr Clennett (Audit Engagement Partner) and Mr Bevan (former Finance Director of Aero Inventory plc) fell significantly short of the standards reasonably to be expected of Members and Member Firms in that they failed to act in accordance with the Fundamental Principles of the ICAEW’s Guide to Professional Ethics and Code of Ethics requiring them to perform their professional work with due skill, care and diligence and to act with professional competence and due care.
Aero Inventory plc was placed into administration in November 2009.
An independent Disciplinary Tribunal will be appointed to hear the Formal Complaint.
Notes to editors:
- The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
- In relation to disciplinary matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process are:
- Decision to investigate
- Decision whether to bring disciplinary proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal
- Tribunal hearing
- Determination and imposition of sanction and/or costs orders
- The FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct Committee will consider each case identified or referred to it and decide whether or not the criteria for an investigation are met.
- Investigations are conducted by Executive Counsel and the Professional Discipline team within the Conduct Division. If disciplinary proceedings are commenced, Executive Counsel delivers a complaint to the Conduct Committee. The Conduct Committee then instructs the Convener to appoint a Disciplinary Tribunal.