The disciplinary tribunal considered the so-called ‘Garuda Transaction’, involving an agreement purportedly reached on 29 June 2006 by which Aero purchased an aircraft parts inventory from PT Garuda Indonesia, the flag carrier of Indonesia, for a purchase price of $34m (£21m) and an agreement purportedly reached on 29 June 2006 by which Aero immediately re-sold to GMF AeroAsia for a purchase price $23m (£14m) some of the inventory which Aero had acquired from Garuda. GMF was a 99% owned subsidiary of Garuda.

It found that Bevan had breached the ICAEW’s fundamental principles of integrity and of performance by including, within the financial statements for the financial year ended 30 June 2006, revenue and profit from the Garuda Transaction, being reckless as to whether the Garuda Transaction had taken place in that year.

Bevan had also breached the fundamental principle of performance by failing to report to Aero Inventory’s board that if the Garuda Transaction should be included in the 2006 statements it should be reported as an exceptional item.

In addition he was found to have breached the fundamental principles of performance and of professional competence and due care in that, in consequence of the application of the ‘straight line discount’ to the stock acquired under certain bulk purchase contracts, the accounts did not show a true and fair view of the state of affairs of Aero Inventory as of 30 June 2006, 30 June 2007 and 30 June 2008.

In reaching the settlement agreement, under which Bevan is excluded for three years and has to pay £170,000 in costs, the FRC said it took account of the fact that his behaviour was not dishonest or deliberate, and that he had cooperated with the FRC, had a good disciplinary record, and had demonstrated contrition.

The FRC said that disciplinary proceedings in relation to the preparation and audit of the financial statements of Aero Inventory are still ongoing against its auditor, Deloitte, and John Clennett, the Deloitte audit engagement partner.