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December 20, 2010

FRC plans to improve company reporting

The UK Financial Reporting Council (FRC) has issued draft plans to strengthen company reporting and ensure the UK makes its voice heard in upcoming regulatory changes across Europe.

The plans also include a draft budget proposing a 2% increase of its total budget to £22million, due to estimates that accountancy disciplinary case costs will increase “significantly” over the next two years.

The organisation does however propose to reduce core operating costs for accounting, auditing and corporate governance by £0.7m and for actuarial standards and regulation by £0.2m compared with the budget for 2010/11.

In the draft the FRC focuses on:

  • Stronger and better-informed engagement between institutional investors and company boards,
  • Corporate reporting and auditing that deliver greater value to investors and better serve the public interest,
  • A strong UK voice in the EU and international debate on the future regulation of corporate governance, reporting and auditing and
  • A more effective UK regulatory framework that adds value for investors and other stakeholders at low incremental cost.

FRC chairman Baroness Hogg said the FRC will encourage more productive dialogue between investors and company boards to help strengthen corporate reporting and auditing frameworks to better serve the needs of investors and the public interest.

“We must also continue to influence the international policy and regulatory agenda. In 2011, the European Commission will develop its proposals on the future of audit and corporate governance and it is vital that the FRC is involved in those debates to ensure that the UK voice is heard,” Hogg said.

The FRC’s agenda addresses some of the issues investigated by the House of Lords economics affairs committee inquiry into audit market concentration.

 

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