An Asian-origin chartered accountant has been fined £10,000 and excluded from the Institute of Chartered Accountants in England and Wales (ICAEW) for acting as an auditor for a limited company without an audit registration for the past 34 years, AccountingWEB reports.
Shahid Shafiq from Bolton carried out audit work since 1988 without ever being registered with ICAEW, thereby evading proper oversight.
Shafiq's conduct went undetected for many years, nor did he disclose any audit clients or fees on his annual return.
But in the returns submitted to Companies House, Shafiq was mentioned as ‘auditor’ and sometimes ‘a senior statutory auditor’.
Interestingly, he was sanctioned by ICAEW for the same misconduct in 1997, but he continued to sign audit reports for the same firm for another 25 years.
He was pulled up by ICAEW’s professional conduct department (PCD) in February 2021 after it discovered Sharif's misconduct.
Shafiq confirmed being an auditor to the company and continued to do so even after being sanctioned.
However, he claimed that he was eligible to audit as the company had not exceeded the threshold of £6.5 million annual turnover.
In response, ICAEW emphasised that firms acting as auditors have to register so that they are monitored for services offered to the clients.
ICAEW said if a firm provides audit opinion then registration is required, irrespective of the size of the company audited.
The PCD argued that Shafiq's behaviour was deliberate as he chose to continue with his misconduct, despite being sanctioned for the same issue earlier.
In his annual returns, Shafiq misled the ICAEW by failing to mention that some of his income was derived from audit work.
ICAEW estimated that Shafiq’s firm earned around £124,000 audit fees over the years, and he saved around £8,693 in the non-payment of audit registration fees during the period.
Apart from the fine and ICAEW exclusion, Shafiq has been ordered to pay £9,130 as costs.
He was given 35 days to pay the penalty and costs.
Bob Blackman MP speaks during the event