The Accountancy Investigation and Discipline Board has decided to launch an investigation into the conduct of certain Members of professional accountancy bodies who were involved in the events leading up to the collapse last year of European Home Retail plc and Farepak Food & Gifts Ltd.

The scope of the investigation shall be as follows:

“The conduct of Members in relation to the preparation of the accounts of Farepak Food & Gifts Limited for the period ending 30th April 2005.”

“The conduct of Members in relation to the circumstances leading up to the collapse of European Home Retail Plc and Farepak Food & Gifts during 2006.”

This decision was taken following consultation with the Institute of Chartered Accountants of England and Wales (ICAEW) and the Chartered Institute of Management Accountants (CIMA).

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy Investigation and Discipline Board) and by the Council. The Committee on Corporate Governance, whose members are drawn from the Council, assists it in its work on corporate governance.
2. The Accountancy Investigation and Discipline Board ('AIDB') is the independent, investigative and disciplinary body for accountants in the UK. The AIDB is responsible for operating and administering an independent disciplinary scheme ('the Scheme') covering Members of the following accountants' professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy, the Institute of Chartered Accountants in Ireland, the Institute of Chartered Accountants of Scotland and the Institute of Chartered Accountants in England and Wales.
3. The focus of the AIDB is on cases which raise important issues affecting the public interest; other disciplinary cases will continue to be dealt with by the individual accountancy body of the Member concerned. The purpose of an investigation is to determine whether there is evidence of an act or acts of misconduct on the part of Members or Member Firms of the professional accountancy bodies. An investigation does not always mean that an allegation has been made or that there is evidence of misconduct on the part of the Member or Member Firm involved.
4. Disciplinary Complaints filed following an AIDB investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a Complaint, there is a wide range of sanctions which it can impose including an unlimited fine, exclusion from membership of a professional body and withdrawal of practising certificates or licenses.
5. All Press enquires should be directed to: Anna Colban, Secretary to the Board, on telephone: 020 7492 2451 or email: a.colban@frc.org.uk, or Ian Rodger, on telephone 020 7492 2395 or email: i.rodger@frc.org.uk.