The Financial Reporting Council (FRC) has published its Plan & Budget for the coming year, with a commitment to push forward quickly its transition to the new regulator, the Audit, Reporting and Governance Authority (ARGA). This work will progress alongside the extensive reform programme already in place in relation to the audit market.
Transformation work is progressing at pace with BEIS currently consulting on 48 of Sir John Kingman’s recommendations, many of which the FRC has a lead role in implementing. The budget includes investment in audit and corporate reporting supervision and enforcement. The FRC’s intensive work programme and transition will run in parallel with, and contribute to, other reviews notably the Brydon Review of the quality and effectiveness of audit and the Competition and Markets Authority review into audit competition.
Stephen Haddrill, Chief Executive Officer of the FRC, said:
“The FRC’s Plan sets out a clear pathway towards the establishment of an enhanced authority, with stronger powers and greater resources, as quickly and effectively as possible.”
“Ahead of full implementation of the Kingman proposals, the FRC will do all in its power to promote transparency and integrity in business, and improve audit quality, corporate governance and investor stewardship.”
The FRC’s strategic priorities for 2019/20 include:
- support the transition to the new Audit, Reporting and Governance Authority (ARGA)
- drive a step-change in audit quality in the UK, using its supervisory and standard setting powers
- increase the planned number of corporate reporting reviews and work to address the Independent Review’s recommendations that it should cover the whole of a company’s annual report
- use its expanded enforcement resources to manage an increasing caseload and accelerate decisions
- promote high quality corporate governance and investor stewardship, including through a new Stewardship Code.
A link to the Secretary of State for BEIS, Greg Clark’s remit letter setting out the Government’s priorities for the FRC can be found here.
In finalising its Plan & Budget, the FRC has taken into account the important and helpful comments received from stakeholders on its proposals. A link to consultation responses can be found here.
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