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October 18, 2011

Calls for a refocused and streamlined FRC

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.

Related articleUK FRC plans major restructure

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