The UK Financial Reporting Council (FRC) and
the UK Department for Business, Innovation and Skills (BIS) have
called for a refocused and more streamlined FRC.
A consultation from the FRC and BIS has
encouraged stakeholders’ comments on whether the FRC’s regulatory
activities should be narrowed to focus on areas of greatest concern
to the operation of the capital markets.
The consultation also proposes reinforcing the
FRC’s independence by giving it the power to require a recognised
supervisory body to impose sanctions on an audit firm or individual
auditor regarding poor quality work and also giving it the ability
to create its own rules for disciplinary arrangements without the
need to obtain the agreement of the professional accounting
bodies.
The consultation proposes replacing the FRC’s
existing seven operating bodies with two board committees, one
focusing on codes and standards, the other on conduct.
“The reforms we’re proposing will help the FRC
to promote transparent and high quality financial reporting, and by
doing so, increase confidence in the regulation of the accounting,
audit and actuarial professions in the UK. They will improve the
FRC’s effectiveness, clarify its role and enable it to better
support economic growth,” BIS corporate governance minister Edward
Davey said.
“A streamlined, unified FRC will help us to
regulate less and carry out our role more effectively. We are
consulting on reforms we believe are urgently needed to secure our
independence of those we regulate, reduce the risk of overlapping,
over-regulation, and help us to promote the interests of the UK in
the international regulatory arena,” FRC chairman Sarah Hogg
said.
The FRC has invited responses to the
consultation by 10 January 2012. The aim is to implement the
changes, guided by the responses, in April 2012.
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