News April 2016 Deloitte LLP, a member firm of the Institute of Chartered Accountants in England and Wales and John

Deloitte LLP, a member firm of the Institute of Chartered Accountants in England and Wales and John Clennett, a member of the Institute of Chartered Accountants in England and Wales

18 April 2016

19/16


A hearing of the Disciplinary Tribunal of the Financial Reporting Council (FRC) will consider a Formal Complaint against (1) Deloitte LLP ("Deloitte"), a member firm of the Institute of Chartered Accountants in England and Wales ("the ICAEW") and (2) John Clennett, a partner in Deloitte and a member of the ICAEW (PDF).

The Formal Complaint concerns the conduct of Deloitte and John Clennett in relation to certain aspects of the audit of the financial statements of Aero Inventory PLC and its subsidiary Aero Inventory (UK) Limited for the financial years ending 30 June 2006, 2007 and 2008.  It is alleged that the conduct of Deloitte and John Clennett fell significantly short of the standards reasonably to be expected of them as, respectively, a member firm and a member of the ICAEW and that they failed to comply with the requirements of the International Standards on Auditing (UK & Ireland).  The hearing relates to the investigation notified in FRC Notice PN 30 of 3 March 2011 and the delivery of a Formal Complaint in relation to Deloitte and John Clennett.

The matter is listed to be heard on the following dates: Monday 9 May 2016 to Thursday 26 May 2016,  Monday 6 June 2016 to Tuesday 14 June 2016, and continuing if necessary on Wednesday 15 to Friday 17 June 2016. 

The hearing will commence at 10.30 am on each day when the Tribunal is sitting. The hearing venue is The International Dispute Resolution Centre Limited, 70 Fleet Street, London EC4Y 1EU.

Notes to editors:

1.    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.

2.    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
  • Investigation
  • Decision whether to bring disciplinary proceedings against a 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 Enforcement Division. If disciplinary proceedings are commenced, Executive Counsel delivers a Formal Complaint to the Conduct Committee. The Conduct Committee then instructs the Convener to appoint a Disciplinary Tribunal.
  1. Formal Complaints filed following an investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a Formal 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 one of the Schemes and withdrawal of practising certificates or licences.

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Alana SinnenCommunications Manager