Financial Reporting Council to investigate Cup Trust's auditors

02 Apr 2014 News

The Financial Reporting Council has extended its investigation into the Cup Trust to include its auditors, Hillier Hopkins LLP.

The Financial Reporting Council has extended its investigation into the Cup Trust to include its auditors, Hillier Hopkins LLP.

In December 2013 the FRC announced an investigation into whether any accountancy firm or individual had committed misconduct in relation to the Cup Trust. This week it announced that it would be extended to “include the preparation and audit of the financial statements for the years ended 31 March 2010 and 31 March 2011”.

The investigation is likely to take around a year, when the FRC will decide whether to bring disciplinary proceedings against an individual member or a firm.

If the disciplinary proceedings are challenged, this may advance to a disciplinary tribunal and if the panel finds against the member, sanctions from the FRC range from a severe reprimand to an unlimited fine, depending upon the extent of the misconduct.

In a statement, Hillier Hopkins LLP said: "Hillier Hopkins LLP has been cooperating with the ongoing investigations by the FRC.  We have not been informed of the nature of the extended investigation which the FRC is now conducting, beyond the information in their press notice. Consequently we have no further information on which to make comment at this time. We will continue to fully cooperate with the FRC.”

The Cup Trust was established as a tax-avoidance vehicle in 2009, and even though income totalling £176m has been raised it since its inception, just £55,000 has been given to good causes.  Yet its ‘donors’ have claimed hundreds of millions of pounds in gift aid tax relief and the charity itself has submitted claims totalling £46m – however HMRC has so far refused to pay these and does not expect to do so.

The Charity Commission opened an investigation into the charity in May last year and appointed Jonathan Burchfield, a partner at law firm Stone King, as an interim manager to run the charity. Mountstar PTC, the sole corporate trustee of the Cup Trust, appealed against the Commission's decision to appoint an interim manager, but its appeal was struck down in October.

 

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