News 2023

The UK Government has announced its decision in relation to the reform of the regulation of insolvency practitioners. Originally the government had identified a single regulator as its preferred option but the latest announcement rejects this option and instead details plans to retain the existing four Recognised Professional Bodies and also introduce a package of additional measures. These additional measures include firm regulation, a public register of IPs, granting the Insolvency Service responsibility for standard setting and a compensation scheme. The detailed government response is available here, The future of insolvency regulation: Government Response.

This summary AML Alert Russia Sanctions – Trade Sanctions Circumvention has been produced by the Accountancy AML Supervisors’ Group (AASG) from an extract from the Department of Business and Trade Notice NTE 2023/08: Russian sanctions – Trade sanctions circumvention. The Department of Business and Trade issued notice NTE 2023/08 to prevent the undermining of trade sanctions, export controls, and other restrictive measures designed and implemented in response to Russia’s invasion of Ukraine. Awareness of the risk and obligations in relation to sanctioned goods is an important first step for those working in the accountancy profession so that they don’t become party to the trade sanctions circumvention. Direct trade between the UK to Russia has fallen significantly since sanctions were introduced. However, Russia will seek to procure restricted goods via other routes. As such, there are risks around displacement of trade and diversion of goods to Russia. Businesses, and their accountants, should ensure that they consider these risks as part of their due diligence. This summary AML Alert highlights the key risk indicators. For more information click here. 

HM Treasury (HMT) has issued a consultation on the Reform of the Anti-Money Laundering and Counter-Terrorism Financing Supervisory Regime Consultation. This consultation offers stakeholders the opportunity to provide their views on the future of AML regulation and supervision, and, in particular, which of the four options proposed would most improve the regime. The consultation closes on 30 September 2023. Chartered Accountants Ireland will be submitting a response. Model 1: OPBAS+ The first potential model would involve no structural change to the regime. The Office for Professional Body AML Supervision (OPBAS), the oversight body, would be given enhanced powers to increase the effectiveness of the AML supervision undertaken by the Professional Body Supervisors (PBSs). Model 2: PBS Consolidation Model 2 would likely see either two or six PBSs retain responsibility for AML/CTF supervision. There could be either one accountancy sector supervisor and one legal sector supervisor, both with UK-wide remits, or one accountancy sector supervisor and one legal sector supervisor within each jurisdiction: England and Wales, Scotland, and Northern Ireland. Model 3: Single Professional Services Supervisor (SPSS) The third model would see a single body supervise all legal and accountancy sector firms for AML/CTF. It may also supervise some or all of the wider sectors currently supervised by HMRC. This body would most likely be a public body, unlike the PBSs. Model 4: Single Anti-Money Laundering Supervisor (SAS) Under this model, all AML/CTF supervision in the UK would be undertaken by a single public body. The major difference between this and previous options is that the Financial Conduct Authority and Gambling Commission would also stop supervising firms for AML/CTF compliance. HMT has organised two roundtables for accountancy firms and practitioners regarding HMT’s consultation on the future of the supervisory system and are inviting as many firms as possible to attend the roundtables to discuss the supervision reform consultation. There will be roundtables on two dates. Firms who would like to attend should sign up for one of the two roundtables using the following links below: 31st August, 11 am - 12:30: https://www.eventbrite.co.uk/e/700132925427?aff=oddtdtcreator. 6th September, 14:00 - 15:30: https://www.eventbrite.co.uk/e/700229012827?aff=oddtdtcreator. If you have any questions about the roundtables, or problems signing up, please contact HMT directly at Anti-MoneyLaunderingBranch@hmtreasury.gov.uk.

ICAEW has shared a recording of a recent webinar titled ‘Bounce Back Loan SARs: what good looks like’ This is free of charge but requires registration via the link below. Bounce back loan SARs: what good looks like (icaew.com)

The Department for Business and Trade has launched a new digital service, the Regulated Professions Register (RPR). The RPR provides information about 200 regulated professions in the UK in one place on GOV.UK, and the service is particularly relevant to professionals from overseas seeking to access the UK labour market and also to UK businesses wishing to attract overseas professionals to the UK. The service signposts individuals to their chosen profession, offers them information about how the profession is regulated and by whom, and provides contact details for the relevant regulator. In launching the service, the Department notes that having this information in one, easily accessible place will make it easier for qualified professionals to navigate the UK labour market, and that it will also be a useful tool to understand more about the UK’s regulatory landscape and the various legislation governing regulated professions.

The deadline for completing your 2022 CPD Declaration has now passed. We requested that it was completed and submitted by 28 April 2023. We would be grateful if you could complete your online CPD Declaration for monitoring purposes, by 31 May 2023. If you are unable to meet this timescale, please contact us immediately. Failure to submit your CPD Declaration in respect of the 2022 CPD year may result in this matter being referred to the Quality Assurance Committee. This may result in regulatory action, including an immediate audit inspection, the imposition of a regulatory penalty or the withdrawal of your audit registration. Further information on the IAASA CPD Guidelines, including checklists and specimen CPD records are available on the Institute’s website here.  If you need further assistance, please email any queries to ricpdobligations@charteredaccountants.ie  

The Institute’s Professional Standards Department recently wrote to all audit compliance principals in relation to the obligations of audit firms with regard to information on the Public Audit Register.  In this letter, audit firms are reminded of the legal and regulatory obligations to: Notify the Institute, within ten business day, of certain changes in relation to an audit firm (specified in Audit Regulation 2.11).  It is not appropriate to wait until the submission of the next firm annual return. Provide complete and correct information in the firm annual return and check standing data for accuracy Provide details of the members of the audit firm’s management board – a firm which does not have a management board separate from the firm principals/shareholders should provide the names of the principals/shareholders in that regard Consider the definition of ‘network firm’ in the Audit Regulations (2.12) and provide details in relation to any network to which the audit firm belongs. It is important to give careful attention to the reminders in this letter.  A failure to provide the appropriate information on a timely basis is a breach of the Audit Regulations which could result in regulatory action, including regulatory penalties, and may also constitute an offence under company legislation. These, and other regulatory matters, were also highlighted in the latest edition of the Regulatory Bulletin.

Professional Standards Department is pleased to publish its Trust and Company Service Providers Thematic Review. This document summarises the responses to a detailed Questionnaire issued to a sample of firms based in Northern Ireland. The majority of firms only provide TCSP services such as company formation / registered office and only provide such services to existing clients alongside other ancillary accountancy services (eg statutory audit, tax and accounts preparation). Firms are aware of the risks associated with TCSP services but do not always consider such services to be high risk when provided to existing clients with a clear business rationale expressed for the service. We are encouraged by these findings which support our wider monitoring and supervision activity.

The deadline for completing your 2022 CPD Declaration has now passed. We requested that it was completed and submitted by 28 April 2023. We would be grateful if you could complete your online CPD Declaration for monitoring purposes, by 12 May 2023. If you are unable to meet this timescale please contact us immediately. Further information on the IAASA CPD Guidelines, including checklists and specimen CPD records are available on the Institute’s website here.  If you need further assistance please email any queries to ricpdobligations@charteredaccountants.ie

Background - The Institute is considering whether any changes may be required to its Professional Indemnity Insurance (“PII”) requirements to ensure they remain fit for purpose. Insurance requirements The Institute’s PII requirements are set out in Chapter 7 of the Public Practice Regulations. Firms within the scope of the Public Practice Regulations have a duty to take such steps as may reasonably be expected to meet claims arising from public practice.  As part of this, firms must put in place ‘qualifying insurance’.  This is insurance which: is provided by a ‘participating insurer’ List of participating insurers ROI and List of participating insurers UK; meets the minimum limit of indemnity specified in Regulations 7.16 and 7.17; complies with The Institute’s Minimum Approved Wording; and provides six years retroactive cover (i.e., cover for claims arising in relation to activities carried on by the firm during the last six years save for circumstances and claims known about prior to the inception of the policy). Share your thoughts We are keen to understand your experience when dealing with PII and your views on aspects of Chapter 7 of the Public Practice Regulations, particularly those that prescribe the type and level of cover our firms are required to hold.  If you would like to share views on any of the following areas, please email professionalstandards@charteredaccountants.ie with your comments. Do you think the Institute’s current PII requirements are appropriate for your business and provide sufficient protection against claims arising from public practice? What are the major challenges to you/your firm when purchasing PII? (Coverage, limit of indemnity, price etc) Do you think the minimum limit of indemnity specified in Regulations 7.16 and 7.17 is too high, too low, or at an appropriate level? Do you think the PII run off requirements at Regulation 7.11 provide sufficient protection to the public? Would you be concerned that any changes to the current run-off requirements could have a detrimental effect on the availability or cost of run-off insurance in the accountancy market? Do you have any other specific concerns or feedback about the Institute’s PII requirements? What changes, if any, to the PII requirements would facilitate your business as well as ensuring protection to the public? The high-level outputs of this review will form part of our engagement with ICAEW and ICAS, who are also engaging with their member firms on this issue.  You may also wish to share your views using ICAEW’s online questionnaire by 31 May 2023.  Whilst this particular project is being led by ICAEW, the outputs may have implications for Institute firms given the close cooperation of all the chartered accountancy bodies in relation to PII.  If completing the ICAEW online questionnaire, there is an option to complete as a member or firm regulated by another accountancy body, and any questions which are specific to ICAEW members only can be marked as not applicable.    Review of ICAEW’s PII Regulations | ICAEW We will provide further updates to firms in due course if any substantive changes are envisaged to the Institute’s current PII requirements.

The latest Newsletter from the SARs Reform Programme is now available. The first 6 reporting organisations have started to use the new SAR Portal to submit suspicious activity reports. This Newsletter provides a timeline for further testing with the addition of more users throughout the year. The National Crime Agency has published 2 new user guides and an FAQs document for the new SARs Portal that can be found on the NCA website.

A working group of the Joint Insolvency Committee (JIC) has been reviewing Statement of Insolvency Practice 3.3 – Trust Deeds (SIP 3.3) and are now inviting comments on the revised SIP. The working group was comprised of insolvency professionals and other stakeholders in the trust deed process including the Accountant in Bankruptcy. The JIC decided to review the SIP because many of the issues which were relevant to the recently revised SIP 3.1 (Individual Voluntary Arrangements) apply equally to SIP 3.3 and because of matters raised within the context of the Scottish Parliament’s enquiry into Protected Trust Deeds and the subsequent Scottish Government response. SIP 3.3 was last issued in 2014. The following is a summary of the key changes between the existent SIP 3.3 and the revised SIP 3.3: The principles, key compliance standards and standards of specific application have been harmonised with SIP 3.1 as far as practicable, subject to amendments required to take account of Scots law, trust deed procedures, appropriate terminology, etc. The language has been simplified, made gender neutral and updated in line with JIC drafting guidance. It was felt appropriate to retain the SIP’s application to all trust deeds and not just protected trust deeds. The application of certain paragraphs to PTDs and unprotected trust deeds has been clarified. Restatement of legislative provisions have been removed as far as possible. The key elements of the Accountant in Bankruptcy’s PTD Protocol have been incorporated. As the SIP is principles based these are not incorporated using the same style/wording/process but the underlying principles and standards are consistent and will bring regulatory force to the Protocol requirements. The following comparisons are available to help with identification of changes between the current SIP 3.3 and the revised version and also as a read across against the recently issued SIP 3.1. SIP 3.3 (2014) to draft SIP 3.3           SIP 3.1 (2023) to draft SIP 3.3           The consultation on the revised SIP 3.3 is open until 10 July 2023.

The UK Government has published the Economic Crime Plan 2 2023-2026. Chartered Accountants Ireland as a member of the Accountancy AML Supervisors Group (AASG) has participated in the development of this latest Economic Crime Plan 2. This Plan builds on the foundations of its predecessor with new actions to improve the system-wide response to economic crime through enhanced cooperation between government, law enforcement, supervisory agencies and the private sector. The key outcomes of this Plan are to reduce money laundering and recover more criminal assets, combat kleptocracy and drive down sanction evasion, and cut fraud. Press release available here.

Professional Standards Department has just published Issue 34, of the Regulatory Bulletin. Click on the link provided to access this publication.

The Professional Standards Board Annual Report 2022 has been published this week.  This Annual Report describes the role and responsibilities of the Professional Standards Board and reports on the Board’s activities in 2022 and on the activity of the Professional Standards Department during that year. 

The Institute has recently requested responsible individuals (RIs) to complete their declaration of compliance with audit related CPD obligations for 2022.  The RI CPD declaration must be completed by each RI registered for audit in Ireland and submitted to the Institute by 28 April 2023. The RI CPD declaration is required by IAASA’s CPD Guidelines and by Regulation 3.17A of the Institute’s Audit Regulations, Ireland.    RIs can access guidance in relation to their enhanced CPD obligations, including checklists and specimen CPD records, at the Institute’s resource hub : CPD requirements for RIs.  Any RI requiring information or assistance in this regard should promptly email any queries to ricpdobligations@charteredaccountants.ie

In February 2023 the UK government updated its guidance on supplying professional and business services to a person connected with Russia. Readers will recall that during 2022 legislation was passed outlawing the direct or indirect provision of accounting services and audit services to a person connected with Russia. The guidance outlines the two exceptions to the ban on audit services and if an audit firm signed an audit engagement letter prior to 16 December 2022, the firm has until 31 May 2023 to complete the audit. However, the firm must notify the Secretary of State that they will be completing the work by 15 March 2023. While the guidance has a caveat that individual firms must take their own legal advice as to whether their activity falls within scope of the sanctions it also gives guidance on some common audit scenarios. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.  

Regulatory Fee Invoices  The Regulatory fee invoices for 2023 are available online at the Myaccount portal of the website to view, print and pay.  Remittance should be made by 31 March 2023.  If you prefer a copy invoice to be emailed, please email Sandra.smiley@charteredaccountants.ie quoting your individual/firm ID.   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. 

A reminder to GB/NI Insolvency Practitioners that revised SIP 3.1 - IVAs is now effective from 1 March 2023. We previously highlighted these changes and a summary is available here.

On 23 February 2023 the Council of the European adopted its tenth package of sanctions against Russia. You can read more details on the tenth package on the European Commission website here a press release on the tenth package here and  Questions and Answers: tenth package of restrictive measures against Russia here.

The Minister for Justice, with the consent of the Minister for Finance, has issued Guidelines under section 37(12) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) clarifying those functions in the State that may be considered to be prominent public functions for the purposes of the Act. This will assist firms to identify domestic Politically Exposed Persons (PEPs) when conducting their risk assessment.