REG - Financial RepCouncil - FRC publishes Tribunal report on Autonomy audit

HPAnnouncement

06/01/2021 08:06

RNS Number : 7326K
  
Financial Reporting Council
  
06 January 2021
  
 

FRC publishes the report of the Disciplinary Tribunal following the sanctions against Deloitte and former partners for audits of Autonomy
 
                                                                                                                          06 January 2021
 
The FRC has today published the report of the independent Disciplinary Tribunal detailing its findings of Misconduct by Deloitte and former partners Richard Knights and Nigel Mercer together with sanctions, in relation to the audits of the published financial reporting of Autonomy Corporation Plc. The FRC previously announced the sanctions on 17 September 2020. The report has been edited for publication. 
 
The Tribunal's final report is available here. 
 
Notes to editors:
 
1.     The FRC's purpose is to serve the public interest by setting high standards of corporate governance, reporting and audit and by holding to account those responsible for delivering them. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
2.       Past FRC Enforcement Outcomes can be found here.
3.     To meet its responsibility as the competent authority in respect of audit enforcement, the FRC operates the Audit Enforcement Procedure. This procedure applies to the investigation and sanctioning of breaches of the various requirements of the statutory auditors of Public Interest Entities (PIEs) and any other cases retained by the FRC including AIM companies with a market capitalisation in excess of €200m.
In brief, the stages of the Audit Enforcement Procedure are: 
·    Initial case examination and decision to investigate
·    Investigation
·    Decision by Executive Counsel as to whether to issue a Decision Notice (a notice with the findings and recommended sanction);
·    Referral to Enforcement Committee and decision by the Enforcement Committee whether to issue a Decision Notice; and
·    Referral to a Tribunal
·    In order for a matter to be referred for investigation by the FRC's Executive Counsel under the Audit Enforcement Procedure, the FRC's Conduct Committee is required to decide whether there is good reason to investigate an Allegation in relation to a Statutory Auditor and/or a Statutory Audit Firm.
 
Investigations are usually conducted by Executive Counsel and the Enforcement division. The FRC's Conduct Committee may direct that the investigation is delegated to a Recognised Supervisory Body (RSB) which will provide an investigation report to the Executive Counsel so that (s)he may decide whether to issue a Decision Notice.
4.       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 under the Accountancy Scheme are:
·    Decision to investigate
·    Investigation
·    Decision whether to bring enforcement 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
Under the Accountancy Scheme 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.
The criteria are specified in paragraph 5(1) of the Accountancy Scheme. A Member or Member Firm shall be liable to investigation under this Scheme only where, in the opinion of the Conduct Committee the matter raises or appears to raise important issues affecting the public interest in the United Kingdom and there are reasonable grounds to suspect that there may have been Misconduct or it appears that the Member or Member Firm has failed to comply with any of his or its obligations under paragraphs 14(1) or 14(2) of the Scheme.
Investigations are conducted by Executive Counsel and the Enforcement division.
 

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