A powerful accountancy body accused of blocking reform of the crisis-hit industry has been accused of ‘hoarding’ cash from a series of major auditing scandals.
The Institute of Chartered Accountants in England and Wales (ICAEW) has amassed £127 million in penalties levied on firms for bungled audits.
But a study by Prof Richard Murphy of Sheffield University into its accounts accuses the body of lacking transparency and failing to use the money to clean up the industry.
The ICAEW stands accused of acting as cheerleader for big auditors despite scandals such as the high-profile collapse of BHS and Carillion.
Murphy said: ‘The worse the conduct of its members, the richer it becomes. Its charter says it must use this money ‘in the public interest’, but it seems to be hoarding it.
Pointing the finger: The ICAEW stands accused of acting as cheerleader for big auditors despite scandals such as the high-profile collapse of BHS and Carillion
‘I find it ironic that this body, which is meant to encourage best practice, should have accounts that are so unclear.’
The ICAEW rejected the findings, saying it was ‘transparent’ and used the money to make it a ‘resilient and enduring force for good’.
Murphy found that the fines had been attributed to the ICAEW’s ‘retained funds’, without explaining this included the fines.
However, in a letter to Parliament the body referred to the money as ‘strategic reserves’ – a term not mentioned in the accounts.
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