Accountancy services found not to be a practising activity

4th November 2021

Blake Morgan was instructed by JW, a member of the Association of Chartered Certified Accountants (ACCA) who was being investigated by the ACCA on an allegation that JW was providing practising services without a practising certificate.


In December 2016, JW had incorporated a limited company, having been a member of the ACCA for some 27 years. JW had no wish to set up in practice as an accountant. She had never held a practising certificate and did not believe that the services that she proposed to provide required a practising certificate. The limited company was to provide management consultancy services to companies.

The company started trading in April 2017 with JW the sole director and shareholder.

Towards the end of 2020, JW was offered employment and decided that she would wind up the limited company. At the same time, she began to have doubts about whether the services that she had been providing in the previous four years might be regarded by the ACCA as practising activities which may have necessitated the taking out of a practising certificate. JW decided that she ought to self-report, which she did and as a result the ACCA began its own investigation.

Initially, the ACCA took the view that JW had been holding herself out as being in public practice and that she would have required a practising certificate. Providing practising services without a practising certificate was a potential disciplinary offence. JW was invited to provide her comments.

There was another issue. JW discovered that when she established the company in December 2016, she should have registered the company with the Revenue for money laundering purposes and had not done so. This was simply an oversight. She arranged for late registration in February 2021. The Revenue acknowledged the application, but took no action against JW for her failure to register some four years before.

The case

Blake Morgan, on taking instructions, needed to establish exactly what services JW had been providing. We also needed to check the ACCA’s regulations as to whether these services fell within the definition of practising services which would necessitate taking out a practising certificate.

We also enquired about insurance. JW confirmed that the company had always had professional indemnity insurance cover. Furthermore, she had taken out run-off cover at the termination of the business. The insurers had always been advised that the limited company was trading as business and management consultants.

JW had also described herself as a member of the ACCA on her LinkedIn profile and also on the company’s website. She had never described herself as a practising member or providing practising services.

JW had made CPD declarations on an annual basis to the ACCA. At no time had she advised the ACCA that she was providing practising services. Indeed, she believed that she was not.

The limited company had never advertised. Work was obtained through past contacts and recommendations.

There was no letterhead or business stationery.

During the four-year period of trading, the limited company had only had six clients, in total. All these clients had their own public practice accountants.

We also established that the limited company had never given tax advice, prepared VAT returns, tax returns or accounts.

The services provided included the following:-

  1. A review of the client’s business operations and making recommendations.
  2. Proposing improvements to management information.
  3. The preparation of a business plan.
  4. Advice concerning the recruitment of staff.
  5. The training of staff.
  6. Implementing the projected management of systems.
  7. Improving financial controls.

Management accounts had always been produced for internal use by the client.

How Blake Morgan helped

Blake Morgan prepared a letter to the ACCA setting out detailed information as described above with regard to the activities of the business over the four-year period. Having consulted the byelaws of the ACCA and the guidelines issued to members, we concluded that the provision of management consultancy services was not a practising activity.

The case manager at the ACCA concluded that the services provided did not constitute public practice work and that there was no case for JW to answer.

JW was grateful for the advice that we gave and the assistance that we provided which resulted in the investigation being concluded with no action to be taken against JW.

Finally, we found the ACCA’s regulations and guidelines confusing with regard to practising activities. There was nothing to indicate that the provision of management consultancy services would be regarded as a practising activity. In the circumstances, it was sensible for JW to have taken legal advice. We are pleased that the matter was resolved very quickly, without further action being taken against the client.

An accountant providing practising services to the public, without holding a practising certificate, would be regarded as a serious matter, which could be referred to the Disciplinary Committee for consideration.

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