Fines against British accounting firms are likely to come to the government in the future after two industry professional organizations said they were ready to reform a system that has paid them more than £ 50 million over the past two years.

Last week KPMG agreed to pay £ 18.7 million in fines and costs after an industry tribunal ruled that the Big Four auditors had dishonestly misled regulators by creating “Fake documents” in relation to the outsourcing of Carillion and another British company.

The money will be paid to the Institute of Chartered Accountants in England and Wales because regulatory action was introduced under the 2004 book of rules known as the Accounting Scheme.

The scheme, which is already subject to reform, has been used less frequently in recent years, but is being reconsidered after record fines against Deloitte and KPMG led to large ICAEW payments.

Fines in these cases were paid to cover the costs of the Financial Reporting Board’s investigation and other unsuccessful investigations, all of which were funded by ICAEW. But the magnitude of the recent fines means he probably stayed with a big surplus.

The agreement has raised concerns that fines could benefit KPMG and Deloitte – both members of the institute – and that the money would be better used to compensate retirees, contractors and other victims of scandals.

ICAEW got over £ 16 million in fines and costs from KPMG because of a conflict of interest in the insolvency of bed maker Silentnight, which cost retirees millions of pounds. He also got a a record £ 21.6 million from Deloitte in 2020 for serious failures in the Autonomy audit, collapsed a software company founded by British businessman Mike Lynch.

The abolition of fines under the accounting scheme for professional organizations contradicts the “audit procedure”, a set of rules introduced by law in 2016 and under which most audit-related violations are now prosecuted and fines paid to the Ministry of Finance to professional organizations.

ICAEW, which has 189,500 individual members worldwide, said Wednesday that it “welcomes the streamlining of the various schemes that now exist to pay for this aspect of the FRC’s regulatory work.”

“We do not believe that any professional organizations will object to the complete removal from the funding process, and all future fines will be sent to the Treasury of His Majesty,” the statement said, adding that they would be happy to discuss it with the government and the government. . regulator.

The Association of Chartered Certified Accountants, which has 233,000 fully qualified members worldwide, said it believes no organization should “profit” from fines levied by the FRC, and that the money should be used to fund future law enforcement.

Mike Suffield, ACCA’s director of professional information, said the body is not “tied” to fines paid to professional organizations. The exact mechanism for using the fines to fund further regulatory action was “open for discussion”, with one option being to have the fees paid to the Treasury and then redirected to the FRC, he added.

“We fully understand the concerns expressed about the current arrangements in the face of more frequent and significant fines, and the broader regulatory reform agenda provides an opportunity to do so,” Suffield said.

Earlier, ICAEW stated that the fines were “not an overspend” because the funds were used to cover the costs of the investigation, including those that did not result in financial sanctions.

Revenues from fines were kept as part of its reserves “to fund strategic projects that address issues of public interest and support the development of the wider profession,” the report said.