Month: August 2021

One of the more hotly debated issues, in the global welter of reporting (and misinformation) about COVID-19 vaccines, is whether children below the age of majority should be given the COVID-19 vaccine.  Even as infection from the Delta variant is surging among children in multiple countries, a Kaiser Family Foundation poll recently calculated that approximately half of parents are holding off on COVID vaccinations for their children and found “significant opposition to schools mandating the vaccines for children ages 12-17.”

In the midst of this global debate, the Saudi Arabian Public Prosecution Service (PPS) has taken an exceptionally bold step to ensure that children receive all required vaccinations, including COVID.  According to Arab News, the PPS has declared that every child under age 18 “has the right to be vaccinated against diseases and failure to do so amounts to abuse.”   This statement is firmly based in Saudi law.

Article 1 of Saudi Arabia’s Child Protection System, any failure to provide a child’s “basic needs or failure to do so, including: physical, health, emotional, psychological, educational, intellectual, social, cultural and security needs” is considered neglect.  The Child Protection System also provides that a child must be provided with vaccines “as specified by the relevant health authorities and in accordance with the scheduled dates and periods prescribed in this regard.”  Under Article 3/3 of the Child Protection System, not completing a child’s required health vaccinations is considered abuse or neglect.

Moreover, Article 18 of the Child Protection System directs the relevant authorities to take “all appropriate measures” for “[p]revention of infectious and dangerous diseases of the child” and “[s]upporting the school health system to play its full role in the field of prevention and health guidance.”  In that regard, the Saudi government has previously directed that only fully vaccinated students could return to the classroom when the new school year begins at the end of August.

Under Saudi law, providing vaccinations to a child is the duty of the child’s father or guardian, and authorities “are obliged to create a medical file for every child to register the required vaccinations and the development of his or her health conditions.”  In addition, school health or substitute health authorities are required, at least annually, to conduct periodic medical checkups for school students throughout pre-university education levels.

This announcement by the PPS is not surprising, in light of the global surge of the Delta variant and the fact that only 30 percent of Saudi Arabia’s population has received full COVID vaccination.  Nonetheless, few countries are likely to take as strong a position on child COVID vaccination as Saudi Arabia has – at least until after clinical trials, perhaps this fall, further establish that children can safely be vaccinated and health authorities can establish how great a risk COVID continues to pose to children.

Over the past year, the United Kingdom Financial Reporting Council (FRC) has been showing substantial vigor in its efforts to oversee auditors, accountants, and actuaries.  In addition to the widely publicized £15 million fine against Deloitte and sanctioning of two former Deloitte partners in relation to Deloitte’s audit of Autonomy Corporation’s financial reporting, the FRC has been seeking a joint-record £15 million fine against another leading audit firm, KPMG, relating to KPMG’s role in the sale of mattress company Silentnight and recently declared, in its annual audit quality inspection results, that nearly one-third of audits that it inspected “still require improvement.”

The FRC’s Annual Enforcement Review 2021, published July 29, provides a detailed review of the FRC’s commitment to increased enforcement.  The Review noted that the FRC had opened more investigations in the past year than the previous two years combined, had an increase in the number of open investigations/enforcement actions at year end, and a 44 percent growth in its Enforcement Division.  In particular, it stated that the FRC had opened 95 cases in the preceding year (compared to 88 in 2019/20 and 46 in 2018/19), and closed 103 cases in the preceding year (compared to 83 in 2019/20 and 53 in 2018/19).

The Review also reported on a number of misconduct-related “themes” that it identified from concluded investigations of accountants over the past six years:

• Accountants’ fraudulent use of company funds;
• Misleading financial reporting (e.g., fabrication of revenue streams, wrongly recognizing revenue, premature recognition of revenue, inappropriate capitalization of costs, failure to account appropriately for bad debts, and inappropriate categorization of liabilities as operational rather than financial);
• “[I]ncorrect and sometimes reckless work” by management on goodwill; and
• Management misleading auditors, for example by withholding key information and even providing false documents.

Chief Compliance Officers in United Kingdom accounting, auditing, and actuarial firms should peruse the Review, and use specific examples of firm and individual misconduct cited in the Review in their internal briefings and training materials.  While the future leadership of the FRC has yet to be determined, firms should expect that the FRC will remain vigorous in its enforcement work as it moves toward transformation into a still more robust and independent regulator, the Audit, Reporting and Governance Authority (ARGA).