Monumental Incompetence at ACCA

Just how incompetent are the people running the Association of Chartered Certified Accountants (ACCA)?

A couple of years ago ACCA was criticised by the Financial Reporting Council (FRC), UK's accountancy regulator, for its educational failures. Now its 2014 report contains even more damning information about recurring failures.

Page 66 of the  FRC's 2014 report  said this:

"We reviewed a sample of applications for a practising certificate with audit (PCAQ). Our purpose was to follow up how ACCA had implemented measures in response to recommendations we had made in previous years and to obtain further evidence to confirm that ACCA is granting applications appropriately. We were disappointed to find cases in our sample where the PCAQ had been awarded to individuals who did not meet ACCA’s requirements. The main reason for this was that ACCA staff were unable to correctly apply the rules, as they apply to complex cases. We also found that the verification of the audit experience of applicants for the PCAQ was weak, in some cases because ACCA staff were unable to correctly apply the rules, as they apply to complex cases. We also found that the verification of the audit experience of applicants for the PCAQ was weak, in some cases because ACCA staff were unable to identify when information received from applicants was incomplete, and because they lacked the background knowledge of audit work required to assess the nature and quality of the audit experience. These failings in the award of the PCAQ led the FRC Board to consider whether it might be necessary to issue a direction to the ACCA under our enforcement powers".

ACCA's 2014 annual accounts contain a provision of £100,000 to deal with the fallout from the above fiasco, with minimal information which is less and qualitatively inferiror to the disclsoures mad eby the FRC. At the AGM held in London on 18th September, ACCA president and the chief  executive gave their usual self-congratulatory speeches and said nothing about the above episodes or their consequences for reputation. One member asked whether any of the officials would be disciplined for this incompetence. There was no response.

ACCA council is responsible for good governance but no council member accepted responsibility for the  failures of internal controls, staff training, monitoring and risk assessment. For the year to 31 March 2014, ACCA chief executive picked up a remuneration package of £339.772. (£293,117 for 2013). Unlike many corporations, ACCA does not permit its members to vote on chief executive's remuneration. So members can't show their displeasure by rejecting the package.