I have a new article out on AccountingWEB where I ask:
Can it really be right that a cosy club-style arrangement between the Financial Reporting Council, Institute of Chartered Accountants in England and Wales and other professional institutes can result in a bunch of accounting regulators imposing fines that then go back to boost the coffers of those professional institutes whose task it was, in my opinion, to make sure that audit failures of the sort that are now commonplace should not have occurred in the first place? My answer is that quite emphatically it is not.
In the last two years the ICAEW has profited by £55 million in this way.
I argue that this should either go to the creditors of the companies who suffered as a result of audit failure or to an educational charity, but should not profit the ICAEW itself.
It would be good to see a response from them
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Success or failure just make sure the cash keeps rolling in. The unwritten misson statement.
Self-regulation never works for the benefit of ordinary people – they institutions are always self-serving. Only well-designed state regulators work and in the UK even they are hard to find.
I had forgotten the sheer breath-taking scale of the 2018 Carillion collapse, the tens-of-thousands of individuals who lost jobs and pensions, the millions lost by banks, companies & investors and the state. https://en.wikipedia.org/wiki/Carillion
They went down owing over £7 billion and now he Official Receiver (on behalf of the government) is suing KPMG for £1.3bn over its incompetent & probably fraudulent auditing https://www.bbc.co.uk/news/business-60243464
The £14.4m Carillion fine would only go a small way to recompense the approx. 18,500 employees who laboured in good faith for Carillion and many of its plethora of subsidiaries plus the employees of the many companies who also failed following the collapse.
It’s debatable whether it should go the all the limited liability creditors……………
No.
This is not an audit system.
This is a financial accounts validation system.
‘Nothing to see here. Move on’.
it seems quite reasonable that all fines for fraud and crime should be donated to the police not the victims. I joke