Monitoring and assessing compliance of ICAEW firms and IPs
Firms and insolvency practitioners (IPs) regulated by ICAEW are monitored to ensure they operate in accordance with laws, regulations, expected professional standards, the ICAEW Code of Ethics and the requirements of ICAEW’s Practice Assurance scheme.
Monitoring is carried out by the Quality Assurance Department (QAD), part of the ICAEW Professional Standards Department (PSD) which carries out ICAEW’s regulatory and conduct work.
QAD reviewers have many years of public practice experience and many are ICAEW Chartered Accountants. As well as keeping up to date with the latest technical developments and interpretations of standards, we provide regular training to all our reviewers to continue to embed our philosophy to be proportionate and focus on the most significant aspects of the review, and to help to ensure a consistent approach across our team.
On average the team carry out around 3,000 monitoring reviews a year.
In addition to the monitoring reviews, QAD reviewers provide guidance and support to firms and regulated individuals, to help them achieve the high standards expected of them. This support includes webinars, roadshows, helpsheets, reports and educational training film dramas. QAD also provides monitoring services for third-party organisations.
Risk-based cycle
Our proactive monitoring approach ensures we review all our firms, on a risk-based cycle. The frequency with which we review our firms is determined by their risk profile which includes annual return data, complaints information and external regulatory intelligence. Review cycles vary from annual to eight years, depending on risk.
We also use size as an indicator to determine the delivery method, within each risk banding, because the size of the firm directly correlates to impact (ie, through size of clients, activities of clients, geographical spread of client base, and the range and nature of services provided by the firm).
We make use of a range of tools when assessing the compliance of our firms and IPs:
- Annual return: the annual return is an integral part of ICAEW’s regulatory relationship with firms. Through the annual return, we gather information on the structure, ownership, and control of the firm as well as ‘variable’ data that act as risk indicators (eg, number of clients in particular risk categories and the types of services provided).
- Information requests: we may write to firms to ask them questions about matters identified through the annual return, or for the firm to explain their approach to handling a matter we’ve identified through our media reviews.
- Thematic reviews: we engage with a small population of firms to perform a deeper review into a particular topic.
- Desk-based reviews: we carry out telephone reviews where firms submit a completed questionnaire and other pieces of evidence in advance that we review to understand the firm’s compliance with the regulations. For new firms, we perform a desk-based review based on the firm’s latest annual return and encourage them to watch our new firm webinar.
- On-site reviews: we visit firms’ offices to perform a detailed review of the firms’ or IPs’ policies and procedures, as well as reviewing client files and interviewing staff to see how the firm is applying the procedures.