A Practice Assurance review checks whether an ICAEW firm has the policies and procedures needed to comply with ICAEW’s regulations, the Code of Ethics and the Money Laundering Regulations. It is not a technical review of the advice you give. ICAEW’s 2026 monitoring report shows the same findings recurring year after year: anti money laundering weaknesses top the list, followed by missing information on fees and complaints, errors in ICAEW records, clients’ money breaches and undisclosed commissions.

What is Practice Assurance and who does it cover?

Practice Assurance is ICAEW’s quality assurance scheme for member firms and holders of an ICAEW practising certificate, and it has been part of ICAEW’s framework since 2004. ICAEW describes it as a framework of principles based quality assurance standards, made up of the Practice Assurance Regulations, which set out how the scheme operates, and the Practice Assurance Standards. Around 12,000 firms operate within it. If you need a practising certificate you will be inside the scheme; see practising certificates for when one is required. Firms that also do audit, insolvency or probate work are subject to additional regulations.

ICAEW states that the reviews are not technical reviews of members’ work. The on site review leaflet says the reviewer does not form judgements on your professional advice; the focus is how the firm meets the relevant standards, regulations and the Code of Ethics, judged against its size and the work it does.

How often will my firm be reviewed, and in what form?

ICAEW aims to review every firm at least once every eight years, and more often where risk factors point that way: the size and complexity of the firm, its previous review history, and factors from ICAEW’s risk monitoring. Reviews come in three forms. In 2025 ICAEW carried out 1,715 separate Practice Assurance reviews covering 2,068 firms, up from 1,185 reviews covering 1,489 firms in 2024. By firms covered, 819 had an on site review, 422 a desk based review (including new firm reviews) and 827 a telephone review.

What happens before and during an on site review?

ICAEW’s guide to the on site review describes the sequence:

  1. Check your last closing record. Confirm that you have done everything you said you would after the previous review. Firms that have not acted are reported to committee.
  2. Pre review call. This usually takes place about 7 to 14 days before the review, to confirm arrangements and the documents needed. Self monitoring documents may be requested in advance.
  3. The review itself. It usually covers a sample of client files, office and client bank account records, your professional indemnity insurance policy and proposal form, and anything arising from planning. If you hold a DPB (Investment Business) licence or are accredited for probate, those areas may also be reviewed.
  4. Closing meeting. Findings go into a closing record that the reviewer discusses with you.
  5. Your written response. You must reply in writing within 15 days, setting out the action you will take and a date for each item. The review closes only once ICAEW has considered your responses.

What are the most common findings?

The 2026 report analyses the share of reviews with at least one finding in each area:

Area Instances Share of reviews
Money Laundering Regulations 937 63%
Basis of fees and complaints, and engagement letters 283 19%
ICAEW records and annual return 252 17%
Clients’ Money Regulations 241 16%
Referrals and commissions 158 11%
Professional indemnity insurance 125 8%
Eligibility 90 6%

Some specifics from the same report are worth checking against your own firm:

  • Fees and complaints. 273 firms had not told clients the basis on which fees are charged and/or the complaints procedure, including the right to complain to ICAEW. An engagement letter is not compulsory, but both points must be given to every client in writing; a terms of business letter or brochure will do. See client complaints procedures.
  • Records and structure changes. Errors in annual return data and ICAEW records were the third most common area. Changes to the structure of your firm must be notified within 10 business days, not left for the annual return.
  • Clients’ money. 109 firms had no bank trust letter, 63 had not carried out and documented an adequate annual clients’ money compliance review, 47 were not using designated accounts when holding £10,000 or more for over 30 days, and 26 had not reconciled clients’ money accounts at least every five weeks. Our page on client money rules explains the regime.
  • Commissions. Section 330 of the ICAEW Code of Ethics requires firms to tell clients in writing what they have received, obtain written consent to keep it, and treat it as clients’ money until consent is given.
  • Professional indemnity insurance. Under the PII Regulations effective from 1 September 2024 the minimum limit is £2m per claim and in the aggregate, except that a firm with gross fee income below £800,000 needs two and a half times that income, subject to a minimum of £250,000. The aggregate excess must not exceed the higher of £3,000 or 3% of gross fee income.
  • Referrals to financial advisers. 92 firms had issues with referrals to restricted advisers or did not know an adviser’s status.

For the AML side, which drives most findings, our page on AML supervisory reviews covers what reviewers test, and the firm wide risk assessment is usually the first document they ask for.

What happens if the review goes badly?

Most reviews end without escalation. For on site reviews in 2025, 16% found nothing requiring action, 65% found points that the firm put right with no need for follow up, 11% needed some follow up and 8% were reported to the Practice Assurance Committee. Across all firms, 88% either had nothing requiring action or dealt with the points raised without follow up.

In 2025 the committee considered 81 visit reports. Reasons included significant weaknesses in complying with the Money Laundering Regulations (34 firms), use of the description Chartered Accountants by firms not eligible to use it (28), significant clients’ money breaches (19), significant PII gaps (4) and failure to notify clients of commission or get consent to keep it (6). The committee issued penalties of up to £10,000 to 44 firms and referred 37 to ICAEW’s Conduct Department. A referral starts the ICAEW disciplinary process. The leaflet notes that reporting a firm for failing to act on its previous review often results in follow up action and/or a financial penalty.

What is ICAEW looking at in 2026?

The 2026 areas of focus are Professional Conduct in Relation to Taxation and working with vulnerable clients. ICAEW notes that the current version of PCRT took effect from 1 January 2026 and that failure to comply may result in disciplinary action. Expect questions on how the firm applies PCRT to tax planning advice and how it identifies clients who may be vulnerable.

How should a small firm prepare?

Illustration only. A two partner firm receives notice of an on site review. Before the pre review call it pulls the last closing record and confirms each promised action was completed. It checks that every client has written notice of the fee basis and complaints route, reruns its annual clients’ money compliance review, and confirms that the bank trust letter is on file. It checks that its PII limit and excess meet the regulations for its fee income, and lists any commissions received with the client consents. On the day, the partners can explain their firm wide risk assessment and show how it shaped their client risk ratings. After the closing meeting they reply within 15 days with dated actions.

What mistakes lead to a referral?

  • Promising actions at the last review and not completing them.
  • Using generic AML templates that do not reflect the firm’s own clients and services.
  • Calling the firm Chartered Accountants after a change of principals without rechecking eligibility.
  • Keeping small client balances, tax refunds or commissions in the office account.
  • Waiting for the annual return to tell ICAEW about a new principal or incorporation.

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.