The UK’s Financial Reporting Council (FRC) has announced plans for a ‘major shakeup’ of its oversight and supervisory functions to speed up the pace of enforcement investigations.
To speed up the investigation and conclusion of enforcement cases, the FRC will increase its number of lawyers and forensic accountants and will strengthen its case examination function in order to fast-track decision on whether to open an enforcement case.
The regulator’s strategy for 2020/21 aims to make further progress in its transition into the Audit, Reporting and Governance Authority, as proposed in the Kingman review last year.
To meet the requirements of the Kingman review, the FRC will recruit over 100 additional employees which will result in an increase of levies from £41.7m ($54.4m) to £47.2m.
Additionally, to improve coverage, the number of Audit Quality and Corporate Reporting Reviews is set to increase by 25%, while audit firm monitoring will be further expanded from the Big Four to challenger firms.
FRC CEO Jonathan Thompson said: “The strategy builds a bolder, more forceful regulator that will act with pace in supervising and holding companies to account.
“Ahead of the FRC’s transition into the Audit, Reporting and Governance Authority (ARGA) I am determined we use our powers to the fullest, to respond to corporate governance challenges.
“The failure of a major company has significant impact, not just for investors, but for employees and communities.”
“The public has a major interest in the health of companies which is why we plan to serve that public interest by using our powers to the fullest within our existing regulatory scope.”