Accountancy body accused of hoarding scandal fines
Powerful accounting firm accused of blocking reform in crisis-hit industry accused of ‘hoarding’ money from series of major audit scandals
A powerful accounting firm accused of blocking reform in the crisis-hit sector has been accused of ‘hoarding’ money from a series of major audit scandals.
The Institute of Chartered Accountants in England and Wales (ICAEW) has imposed £127 million in fines on companies for failed audits.
But an investigation by Prof. Richard Murphy of the University of Sheffield into its accounts accuses the body of lacking transparency and not using the money to clean up the industry.
The ICAEW has been accused of acting as a cheerleader for major auditors, despite scandals such as the high-profile collapse of BHS and Carillion.
Murphy said, “The worse the behavior of its members, the richer it gets. According to her charter, she must use this money “in the public interest,” but she appears to be hoarding it.
Pointing the finger: The ICAEW is accused of acting as a cheerleader for major auditors, despite scandals such as the high-profile collapse of BHS and Carillion
“I find it ironic that this body, which is meant to encourage best practice, has such unclear accounting.”
The ICAEW rejected the findings, saying it was “transparent” and used the money to make it a “resilient and lasting force for good.”
Murphy found that the fines had been attributed to the ICAEW’s “withheld funds,” without explaining that this included the fines.
However, in a letter to parliament, the body referred to the money as “strategic reserves” – a term not mentioned in the accounts.