ICAEW Averts Crisis Over Audit Ethics Rules

by Robin Pilgrim, LawAndTax-News.com, London

03 December 2004

Following its second meeting on the subject, the Institute of Chartered Accountants in England and Wales announced on Wednesday that it has provisionally approved controversial proposals put forward by the Auditing Practices Board which seek to prevent the same accounting firm from preparing and auditing a company's accounts.

At a meeting last month, the ICAEW Council voted to delay a decision on the adoption of the proposed rules by the December 15 deadline, citing concerns that the APB's rules would impose an unreasonable burden on the UK's SME sector.

However, at a meeting on December 1, the Council announced that it would grant its approval to the guidelines on the understanding that further amendments are negotiated by the APB with a specially established subcommittee.

The compromise proposal is thought to have come about following the revelation that in the worst case scenario, the ICAEW could lose its status as a supervisory body if it fails to adopt the rules.

However, according to a report from the Accountingweb news service, despite the Council's provisional approval of the audit ethics guidelines, several of the panel's members expressed unease at the implications of the proposed rules.

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