The UK Financial Reporting Council (FRC) plans to focus on improving codes and standards, international influence, strengthening conduct work and enhancing and overhauling its disciplinary scheme in the next 12 months.
FRC chairman Baroness Sarah Hogg said the key challenge for the FRC in the coming year will be to “work with investors, business, the professions and other regulators”, identifying and addressing “the challenges facing those responsible for corporate governance and reporting in the UK”.
Hogg made the comments in the regulators 2011/2012 annual report, which among over things highlights its work on the UK Corporate Governance and Stewardship codes and reform of the Council itself.
In the annual report, Hogg states that in the first assessment of the implementation of the two codes, the FRC has “proposed key improvements in the way companies report on the key strategic risks facing their businesses” and supported the Sharman Panel of Inquiry “to consider going concern and liquidity risks.”
The FRC has also reviewed 300 sets of accounts in the past fiscal year as way to assess the quality of corporate reporting in the UK, as well as monitoring the quality of 108 audits and completing eight firm wide inspections of major auditors.
On its recent structural reform, Hogg said the creation of internal councils would ensure it remained “an accountable and transparent standard setter.”
“We have created two Board Committees, on Codes and Standards and Conduct, to co-ordinate the work of the different parts of the organisation, drives forward our international work and takes a number of supervisory decisions. We have also created three expert Councils to advise on accounting, audit & assurance and actuarial issues,” Hogg explained.
In terms of its financials, the FRC came in under budget, with £21.2m ($34m) total expenditure. This comprised £15m core operating costs, £2.4m audit inspection costs and £3.8m accountancy and actuarial disciplinary case costs.