Accountants Disciplined over Audit Governance
TWO ACCOUNTANTS have been disciplined by the ICAEW for failing to properly govern clients who provided a large proportion of their firms' audit fees.
A Jasani of Jasani & Co, and Kiran Shah of Henderson & Co, were found in separate cases to have provided services to audit clients that represented a large proportion of their firms' fee income, and failed to properly govern the situation.
Jasani & Co represented an audit client whose fees were, at one point, worth around 25% of the practice's annual fees. Ethical standards introduced in 2004 by the ICAEW set out that firms should step down fr om a client wh ere its services will regularly exceed 15% of the firm's annual fee income.
Jasani expressed regret that he had not sought assistance from the ICAEW in resolving the issue. His firm had no previous disciplinary record. The tribunal severely reprimanded the firm, and ordered a fine of £5,000 and costs of £3,434.
In the second tribunal, Kiran Shah allowed his firm to regularly provide audit services to two clients whose fees were a large proportion of the firm's overall income.
The tribunal found that Shah had said he would step down from one client, but continued for another four years. He also falsely stated that his firm had completed an audit compliance review. Shah said he had hoped the revenues would represent a smaller proportion of fees as time went on.
Shah was excluded from membership, fined £5,000 and ordered to pay costs of £4,200.