Outcome of disciplinary case against Philip Black in connection with Presbyterian Mutual Society
News types: Investigations
Published: 18 November 2015
67/15
The Financial Reporting Council (FRC) announces the outcome of the disciplinary case in connection with Mr Philip Black, non-executive former director of Presbyterian Mutual Society (PMS) and a member of the Institute of Chartered Accountants in Ireland.
A settlement agreed between the Deputy Executive Counsel to the FRC, Jayne Astley and Mr. Black has been approved by a legal member of the FRC independent Tribunal. Mr Black has admitted that his conduct fell significantly short of the standards reasonably to be expected of him in that he breached the ICAI’s Fundamental Principle of Professional Competence and Due Care in the following respects:
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In relation to the PMS financial statements for each of year ends 2007 and 2008, Mr Black erroneously and unreasonably assumed that PMS was complying with the prohibition in its own rules on taking deposits and was in compliance with applicable legislation, without having an adequate understanding of the regulatory framework that applied to PMS and without addressing his own mind to whether the Board of PMS in fact had an adequate basis for reaching any such conclusions, or whether these were questions which required expert legal advice, based on up to date information about PMS’s business.
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Mr Black failed to take any adequate steps to address PMS’s dangerously low liquidity levels during 2008, or adequately to consider the implications for the continued use of the going concern assumption.
The parties agreed the following terms of settlement.
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Mr Black to receive a Reprimand
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A sum of £50,000 to be paid by Mr Black as a contribution towards the Executive Counsel’s costs.
The investigation into Moore Stephens (NI) LLP, as auditors of PMS, is ongoing.
Notes to editors:
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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.
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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:
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Decision to investigate
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Investigation
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Decision whether to bring disciplinary proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal
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Tribunal hearing
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Determination and imposition of sanction and/or costs orders
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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.