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ICAEW consults on changes to guidance on disciplinary sanctions

What is happening?
On 23 April 2025, the Institute of Chartered Accountants in England and Wales (ICAEW) began consulting on new disciplinary sanctions guidance. The guidance, which was last comprehensively reviewed in 2018, and last updated in June 2023, provides a framework for assessing the seriousness of misconduct (including appropriate sanctions), whilst aiming to ensure transparency for those subject to disciplinary action.

The key potential changes being explored in the consultation include:

updated financial penalty amounts (which currently range from £1,000 to £20,000), in line with inflation
the introduction of a new section of the guidelines to deal specifically with cases of dishonesty (which are currently addressed under the broader area of lack of integrity), and updated categorisations of levels of seriousness, and aggravating and mitigating factors, which better reflect the nature of the misconduct

new or updated sections on ethical breaches, sexual misconduct, audit-related misconduct, non-cooperation, anti-money laundering compliance, and tax-related breaches
increased penalties for ethical breaches and for failing to cooperate with ICAEW investigations or for engaging in conduct that frustrates ICAEW’s regulatory functions
an updated audit section, with an additional tier of seriousness, and revised audit fee multipliers, and guidance that financial turnover is considered when considering a proportionate sanction.

The consultation concerns ICAEW's disciplinary sanctions guidance only. A second consultation, concerning the separate ICAEW regulatory sanctions guidance, is expected to follow later this year, or in 2026.

The updated guidance on sanctions will impact accountants, both individuals and firms, who are ICAEW members.

They will face more potential regulatory risk in relation to the updated and increased penalty sums, the new categories for breaches, and the increased scrutiny of their conduct. Similarly, the changes will be of relevance to the insurers of these firms and individuals, which will often be liable for the costs of responding to ICAEW investigations, and for ICAEW's own investigation costs. The proposed changes also send a message to the public, emphasising a low tolerance for unethical behaviour within the profession.

All interested parties have been invited to respond to the consultation by email.

Why does it matter?

The consultation is significant as the ICAEW, a leading professional body, regulates a significant part of the profession, to ensure that member firms and individuals uphold standards of professionalism, integrity and competence.

Any changes to proposed standards, codes of conduct and appropriate sanctions should therefore be carefully considered to ensure that both members and firms do not fall foul of updated expectations, which can lead to disciplinary action, reputational risks and sanctions.

One significant change is that financial penalties are to be increased in line with inflation. This, along with heightened penalties for ethical breaches and failures to cooperate with investigations, mean a potentially increased exposure for individuals and firms subject to investigation by ICAEW.

What actions should you take?

Accountancy professionals and firms regulated by ICAEW may wish to provide their input on the proposed changes, in line with ICAEW's goal of meeting the expectations of both stakeholders and the public.

Similarly, ICAEW member firms may want to consider their internal policies, to ensure that they align with the proposed changes to the guidance, in preparation for any future potential investigations.

Insured accountants and firms may also want to check their PI policies carefully, ensuring that their level and terms of cover remain appropriate, in light of the proposed changes.

Key dates

The consultation was open for comment until 9 June 2025. It is anticipated that it may take 18 months from the initial consultation to the publication of any new guidance, with new rules likely to be in place by the end of 2026.

George Smith
Partner
+44 7730 321908
george.smith@rpclegal.com