Chartered Accountants Ireland,  Professional Standards department, together with, the other members of CCAB Ireland have issued a joint statement to the profession following recent and ongoing developments in Ukraine. This guidance considers members’ obligations in relation to sanctions, ethical considerations and obligations under AML legislation.

UK  Following the UK Prime Minister’s announcement to the House of Commons on 22 February 2022, The full details of the measures and sanctions imposed on Russia are available on the Foreign, Commonwealth & Development Office website. Professional firms and relevant practitioners will be legally required to adhere to these sanctions to safeguard the UK and the reputation of their industries. Where there is a failure to adhere to the sanctions, the Office of Financial Sanctions Implementation (OFSI) has the power to levy civil monetary penalties for breaches of financial sanctions. OFSI works with law enforcement for the most egregious cases where criminal prosecution may be considered. Details of their enforcement approach is available on OFSI’s website. In addition, a statement published by the Financial Conduct Authority (FCA) in response to the sanctions reminds the FCA’s supervised populations of its expectations around sanctions. Members should continue to consult these sources of information for future updates. EU/Ireland Information on the sanctions package imposed by the EU/Ireland is available from the Central Bank of Ireland website. 

Regulatory Fee Invoices  The Regulatory fee invoices for 2022 are now available online at the Myaccount portal of the website to view, print and pay.  Remittance should be made by 31 March 2022.  Need assistance?   Please email Sandra.smiley@charteredaccountants.ie with your name and member/firm ID along with the query or changes required.  We will issue a revised invoice if this is appropriate. 

The Insolvency Service GB has published the long awaited Consultation: The Future of Insolvency Regulation. This paper consults on proposals to strengthen the insolvency regulatory framework. The Government’s preferred option is to create a Single Regulator to replace the four authorising bodies (CAI, ICAS, ICAEW, IPA). In addition, the Government is also recommending the regulation of firms and not just individual Insolvency Practitioners in certain circumstances. The proposed new regulatory model would apply to England, Scotland and Wales. Insolvency, including regulation of insolvency, is a transferred function in Northern Ireland, although there is close alignment of the insolvency and regulatory frameworks between Great Britain and Northern Ireland. However, the document states that the Government will liaise closely with the Northern Ireland Executive to consider the impact of the reforms in Northern Ireland. The Institute will be responding to this Consultation with responses to be submitted by 25 March 2022. For more information see The future of insolvency regulation - GOV.UK (www.gov.uk).

From 22 December 2021 the Institute of Chartered Accountants of Scotland (‘ICAS’) is no longer a recognised accountancy body (RAB) in Ireland.  As notified to Institute members and firms in recent news items and in direct communication to audit compliance principals, the revocation of ICAS’s RAB status will have implications for Institute registered audit firms who include ICAS members amongst the firm’s responsible individuals (RIs) or amongst the qualified majority of owners and management board members of the audit firm.  Firms have been advised of the appropriate actions to take in this regard.  Such actions include relevant individuals applying for reciprocal membership of the Institute. The revocation of the recognition of ICAS as a RAB follows on the derecognition of the Institute of Chartered Accountants in England and Wales (‘ICAEW’) on 21 July 2021.  The issues arising for ICAEW members at Institute firms from that time are the same as those arising now for ICAS members. It has been necessary to amend the Institute’s Audit Regulations and Guidance (effective 1 January 2020) (‘the Audit Regulations – Ireland’) to reflect the fact that ICAEW and ICAS ceased to be RABs on 21 July 2021 and 22 December 2021 respectively.  This amendment has been made by way of an addendum to the Audit Regulations – Ireland (‘The December Addendum). The December Addendum includes amendment to the definitions of ‘Institute’, ‘appropriate qualification’, ‘audit affiliate’ and ‘practising certificate’ and clarifies a reference in guidance to the eligibility of reciprocal members for audit registration. The December Addendum is effective from 22 December 2021 and is to be read in conjunction with the Audit Regulations - Ireland. The December Addendum supersedes a similar addendum, now withdrawn, which was issued to reflect the derecognition of ICAEW as a RAB in July 2021. The Addendum and the Audit Regulations -Ireland, which are to be read together, are available on the Institute’s website. In addition, the Institute’s Public Practice Regulations have been amended with effect from 22 December 2021 to provide clarity in relation the requirements for practising certificates (‘PCs’) for reciprocal members who are also members of ICAEW or ICAS and hold a PC from ICAEW or ICAS respectively.  The change has been made at Regulation 5.2A of the Public Practice Regulations which are available to read on the Institute’s website.

Professional Standards has published its first Report on UK AML Supervision. This covers the period April 2020 – April 2021.

Our Individual Annual Return 2021 is currently available for completion online.  Please be reminded that this was due to be submitted by 29 October 2021. If you have yet to complete and submit your return, we would encourage you to do this at your earliest opportunity. Click here for your Individual Annual Return. We appreciate that this is a difficult period for members due to the Coronavirus and that members will be prioritising matters differently than they would in normal times. If unable to meet this timescale please contact Individual Annual Return.

The way you submit Suspicious Activity Reports (SARs) to the National Crime Agency (NCA) is changing. As part of the SARs online programme the NCA are replacing the current SAR online portal. Watch this short video for an online demo of how it will look, the reasons for the changes and how those changes can help improve financial crime intelligence. The changes aren’t due to go live until next year and Professional Standards will keep you informed of the progress.  Please see SAR Online demo - YouTube.

The updated CCAB Economic Crime Manifesto went live on 2 November 2021.

The Professional Standards Department has issued its first Annual Report on its UK anti-money laundering supervisory activities.  The report is a recent requirement of the UK’s anti-money laundering legislation and covers the year to 5th April 2021.  It summarises the approach of Chartered Accountants Ireland to fulfilling its obligations as an AML Professional Body Supervisor in the UK and contains statistical information regarding the population subject to supervision by the Institute.  The report can be accessed here.

The UK Financial Intelligence Unit (UKFIU) is inviting all members of the regulated sector to respond to their short engagement survey, to help the UKFIU understand how well they are currently supporting reporters and the impact of changes being made. Your responses will be used to understand how the UKFIU can continue to improve they work with our sectors. Please complete the survey by clicking the following link: https://www.homeofficesurveys.homeoffice.gov.uk/s/UKFIU_Reporter_Engagement_Survey/.

Chartered Accountants Ireland (‘the Institute’) has, in accordance with its Bye-Laws and by under various statutes in Ireland and the UK, specific supervisory and regulatory obligations in respect of its membership. The Professional Standards Department of the Institute is responsible for the exercise of its regulatory functions through a regime that includes regulatory and disciplinary committees and bodies comprising accountants and non-accountants.  Due to a number of retirements, the Institute is seeking to recruit persons for appointment to the Conduct Committee, the Disciplinary and the Appeal Panel. At present, we are particularly interested in hearing from accountants who may be interested in such roles.  Further information about the Conduct Committee, the Disciplinary and the Appeal Panel as well as the appointment process can be found in the relevant sections of the information pack for applicants.  If you would like to request an application form please email committeerecruitment@charteredaccountants.ie  

Your Individual Annual Return 2020 is available for completion online.  Please be reminded that this is due to be submitted by 30 October 2020.Click here for your Individual Annual Return.We appreciate that this is a difficult period for members due to the Coronavirus and that members will be prioritising matters differently than they would in normal times. If unable to meet this timescale please contact Individual Annual Return.

Chartered Accountants Ireland is pleased to announce the publication of the draft AML Guidance for the accountancy sector.This is draft guidance pending approval from HM Treasury. This guidance is based on the law and regulations as of 10 January 2020 – this incorporates amendments required as a result of the UK’s transposition of the 5th Money Laundering Directive. A brief overview of the main changes is available here.

Our Individual Annual Return 2020 is available for completion online.  Please ensure it is submitted by 30 October 2020.Click here for your Individual Annual Return.

The Government has just issued a Consultation on the new Economic Crime Levy announced in the March 2020 Budget. The levy will fund new government action to tackle money laundering, and help deliver the reforms committed to in the 2019 Economic Crime Plan.  The consultation seeks views on what the levy will pay for, how it should be calculated and distributed across the anti-money laundering (AML) regulated sector, and how the levy should be collected. The closing date for responses is 13th October 2020.

Please be advised that Regulatory Fees for the year 2020 will be issued during the month of January 2020.  Notification will be sent from Professional Standards when these are available for payment.

The Professional Standards Department (PSD) Quality Assurance Team has recently compiled a list of common matters arising on audit and investment business inspection visits, which are set out below. Please note that, where PSD returns to firms that have had a relatively recent visit, it conducts follow-up procedures to ensure that the firm has taken action to address matters raised at the previous visit. Audit Inspections Financial  Reporting Firms need to perform audit procedures to evaluate whether the overall presentation of the financial statements, including the related disclosures, is in accordance with the applicable financial reporting framework which, in recent years, has been substantially changed by the introduction of FRS 100-105 and amendments to company law. PSD found that, for the most part, firms had adequately addressed the requirements of FRS 102 and, in RoI, the Companies Act 2014 (‘CA 2014’) through the use of checklists. However, non-application of FRS 102 by audit clients was sometimes not identified. Firms should ensure that their audit procedures to assess the appropriateness and completeness of disclosures are up to date for the relevant financial reporting regimes. Certain common omissions were identified: Statement of Changes in Equity or Statement of Cash Flows, where relevant; Significant judgements and key sources of estimation uncertainty in relation to amounts recognised in the financial statements (FRS 102 s8.6-8.7); Where relevant, material uncertainties related to events or conditions that cast significant doubt upon the entity’s ability to continue as a going concern (FRS 102 s3.8-3.9); The measurement basis (or bases) used for financial instruments and the other accounting policies used for financial instruments that are relevant to an understanding of the financial statements (FRS 102 s11.40); Disclosures relating to creditors required by CA 2014 Schedule 3, such as terms of payment/repayment and the rate of any interest payable on debts. (N.B.The specific FRS 102-related matters noted above relate to financial statements prepared in accordance with the full requirements of FRS 102 and may not be relevant to financial statements where the small/micro companies regime is applied.) International Education Standard (IES) 8 (Revised) IES 8 Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (Revised) was issued by the International Accounting Education Standards Board (IAESB) in December 2014 and is effective from 1 July 2016. Its objective is to establish the professional competence that professional accountants develop and maintain when performing the role of an Engagement Partner. During an audit monitoring visit, the inspector will make enquiries to assess whether a firm is familiar with IES 8 (Revised), including consideration of the learning outcomes which are listed in Table A to the Standard. Firms can obtain a copy of IES 8 (Revised) at: http://www.ifac.org/system/files/publications/files/IAESB-IES-8.pdf Investment Business inspections Investment Business (IB) inspections carried out by PSD over the last few years had focused on firms holding IB1/IB2 authorisation. However, PSD is now conducting an increased number of IB inspections to firms holding all levels of IB authorisation, including a sample of firms holding IA1/IA2 authorisation. Firms should be mindful of, and ensure they address, the following  matters Investment business procedures (IBR 2.56) All authorised firms are required to establish and maintain adequate written investment business procedures. These should include managing conflicts of interest, maintaining ‘Chinese Walls’ and the consequences of breaching them, along with the handling of errors and complaints. A firm must adequately train its principals carrying on investment business and its employees using these procedures. Training (IBR 2.60) Authorised firms must make arrangements to ensure that principals and employees involved in investment business maintain an appropriate level of competence and comply with Institute CPD requirements. Firms authorised in Category IA2 and above must make arrangements to ensure compliance with the Central Bank Minimum Competency Code, which has recently been updated. A copy of the Code can be obtained on the Central Bank of Ireland’s website. Investment Business Compliance Review (IBR 2.58) An authorised firm must carry out an Investment Business Compliance Review (IBCR) at least annually. PSD found that, for some firms, an annual IBCR had not been carried out, or did not include a whole firm review, a review of accounting records and a sample of client files. Some IBCRs did not identify different types of IB advice provided by the firm or non-compliance with the IBRs. Corrective action was not always taken in a timely manner. Engagement letters (IBR 3.19-3.20) PSD found that some firms did not have an engagement letter in place, or the letter had not been agreed with the client prior to investment business advice being provided, as required by IBR 3.19 or did not include the minimum details required by IBR 3.20. Commission consent and disclosure (IBR 3.30-3.32) If a firm receives commission it must account to the client for that commission, and both the terms (%) of the commission and the amount (€/£) must be disclosed. In cases where the firm retains the commission, it must have the client’s written consent to do so. Consent to retain commission can be obtained in the client engagement letter. The Quality Assurance Committee views non-compliance with commission consent and disclosure requirements very seriously. Section 30 receipts (IBR 4.44-4.46) Firms must issue receipts when they receive client premiums or investment business clients’ money. Details of what must be included on the receipt are specified in IBR 4.45. Other matters Firms should ensure that they are aware of their category of IB authorisation and the limits of that category. Category IA2 is required to hold client premiums; Category IB2 is required to hold investment business clients’ money; and If handling or holding client premiums or investment business clients’ money, the firm must appoint an independent accountant and submit an independent accountant’s report to the Institute. Carrying on investment business, when not authorised to do so, is an offence under the Act. Firms may wish to review their category of investment business authorisation and assess whether it is suitable for their needs. Firms should refer to Schedule 1 to Chapter 1 of the IBRs for activities which may be undertaken under the various categories. For further details on the above matters, please look out for PSD’s forthcoming Regulatory Bulletin. For advice or support on the above matters, firms may contact, in strict confidence, the Practice Consulting Team, which is independent of the Professional Standards Department.