Outcome of investigation into the conduct of: Sixonethreeone Limited, Former Member Firm of ICAEW and Mr Paul Newsham, Member of ICAEW
01 July 2013
Outcome of Investigation into the conduct of Sixonethreeone Limited (formerly known as HWCA Limited) and of Mr Paul Newsham as auditors to Worthington Nicholls Group plc and its predecessor businesses.
The Financial Reporting Council’s Executive Counsel has delivered a disciplinary Formal Complaint in connection with the conduct of Sixonethreeone Limited (formerly known as HWCA Limited) and of Mr Paul Newsham in relation to their audit of the financial statements of Worthington Nicholls Group plc and its predecessor businesses. The allegations in respect of the financial year ended 30th September 2004 relate to Mr Newsham alone. The allegations in respect of the financial years ended 30th September 2005 and 2006, and the audit of the interim financial statements for the six months ended 31st March 2006, relate to both Mr Newsham and Sixonethreeone Limited.
In particular, the Complaint alleges that the conduct of Sixonethreeone Limited and of Mr Newsham fell short of the standards reasonably to be expected of ICAEW Members and Member Firms in that they failed to act in accordance with the ICAEW’s Code of Ethics fundamental principle to act with professional competence and due care. The alleged misconduct occurred in relation to the following areas for each of the financial years 2004, 2005, 2006 and the interim 2006:
- The identification of potential audit issues in the planning process.
- Accounting policies adopted and audit evidence obtained.
- Quality control and closure of the audit.
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.