ICAI withdraws registration from two accountancy firms

 

The Institute of Chartered Accountants in Ireland (ICAI) has withdrawn the audit registration of two accountancy firms for failure to hold the required professional indemnity insurance. The firms involved are Grimes and O'Connor of Dame Court in Dublin and NH Leeson and Associates of The Moorings in Malahide.

Withdrawal of audit registration means that the firms can no longer carry out auditing work. The ICAI's audit registration committee is responsible for ensuring that accountancy firms doing audit work meet the institute's rules for registration as an auditor. These rules include requirements about qualifications and experience in addition to qualification as an accountant and membership of the Institute as well as the requirement to take out professional indemnity insurance. This insurance is required in order to provide a means of compensating clients who suffer financial losses because of negligence by the accountant in carrying out the audit.

Despite the withdrawal of its audit registration, a chartered accountancy firm can continue to practice preparing company accounts, offering tax advice, corporate finance advice and other services. However, firms must hold professional indemnity insurance covering all its activities in order to remain in practice as chartered accountants. If this insurance is not in place a firm is liable to disciplinary action including ultimately exclusion from membership of the Institute.

Mr Norman Leeson of N H Leeson said yesterday that the removal of his audit registration was "a technical thing between the Institute and myself". He said he was currently in discussions with the institute about the issues, adding that one of the matters being considered was what work he wanted to do. He declined to comment further.

Mr John O'Connor of Grimes and O'Connor was not available for comment yesterday. The ICAI confirmed the withdrawal of the audit registrations. Separately, the June issue of the ICAI magazine, Accountancy Ireland, included details of a number of recent hearings of its disciplinary tribunal. The firms involved were not named. One firm was censured, fined £1,000 plus costs of £750 for failing to conform to accounting standards, working inefficiently or incompetently and not having the minimum level of indemnity cover.

Another firm was admonished and had to pay costs of £500 for failing to conform to auditing standards and technical rules. A third was admonished and had to pay costs of £250 for not having adequate professional indemnity insurance cover.