Does ACCA Have Independent Auditors?
ACCA is audited by Thomson Cooper & Co, a firm of accountants based in Dunfermline. Its partners include ACCA members. Companies Acts say that shareholders and members of a company are ineligible for the appointment of auditors of that company. There are many similarities between the interests of shareholders and ACCA members, company boards and ACCA council and executives. The ethical guidelines issued by ACCA also talk about "perceptions" and "appearance" of independence. Yet the idea that ACCA is audited by its members appears to violate the basic idea of auditor independence.
Page 17 of the 2004 accounts shows
that auditors received nearly £86,000 in fees compared to
£71,000 in 2003. The report says that they provided "Other
services". This means that they became party to the transactions that
they audited. No information is provided about the nature of "other
services". So what proportion of their total income did the auditors
received from ACCA? Is it over reliant on ACCA for its fees? Does ACCA
income constitute 10%, 15% or something else of the fees of the office
responsible for auditing ACCA? The firm's' web site provides no
information about its income. It does not appear to publish any audited
accounts. Thus there is no way of correcting the impression that the
firm's independence may have been compromised. Prem Sikka raised
questions about the independence of ACCA auditors at the 2005 AGM, but
no one could provide any information about the total income of the firm.
ACCA claims to be leader in
corporate governance practices, but provides no information about audit
contract, audit tender, discussions between ACCA council and auditors,
discussions between ACCA directors and auditors, any material concerns
discussed with ACCA officials, composition of the audit team or
anything else. Virtually nothing is known about the relationship
between auditors and ACCA officials.