The Financial Reporting Review Panel (‘the Panel’) today published amendments to its Operating Procedures (‘Procedures’) for public consultation.

There is no change in substance to the manner in which the Panel will conduct its enquiries. The proposed amendments are designed to maintain public confidence in the work of the Panel as an independent regulator, either by clarifying existing practices or introducing new measures that lend additional transparency.

The main amendments:

• set out the way in which the Panel manages conflicts of interests when appointing Panel Groups (paragraph 25);
• provide that the Panel will copy its first letter to a company Chairman to the Finance Director, where practicable (paragraph 16);
• confirm the terms on which the Panel receives information (paragraph 47);
• permit disclosure of information for the purposes of audit (paragraph 59);
• clarify that a Panel Group will take legal advice and discuss the matter with the Chairman of the Financial Reporting Council before writing a final letter to the Chairman of a company indicating its intention to apply to court (paragraph 36);
• allow the Panel to copy the letter to a company closing a case to the senior partner or Chairman of the company’s auditors (paragraph 34); and
• allow, in certain circumstances, for the substance of cases to be published (paragraph 67).

There are also numerous drafting amendments consequential on the appointment of a second deputy Chairman to the Panel.

The Procedures support the Panel’s objective of working with companies on a consensual basis. The Procedures are also informed by the Panel’s commitment to the principles of good regulation which include accountability and transparency.

Most of the Panel’s work is conducted in confidence and the Panel has decided that it will, periodically, submit its activities to independent audit to provide assurance that its Operating Procedures are being complied with.

The Panel welcomes comments on the Proposed Procedures by 24 April 2008. They should be addressed to:

Carol Page
Director, Panel Operations
Financial Reporting Review Panel
5th Floor, Aldwych House
71-91 Aldwych
London WC2B 4HN
Email: c.page@frc-frrp.org.uk  

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy & Actuarial Discipline Board) and by the Committee on Corporate Governance.
2. The role of the Panel is to examine the annual accounts of public and large private companies to see whether they comply with the requirements of the Companies Act 1985 (‘the Act’), including applicable accounting standards. Following implementation of the Accounting Regulation (EC) No. 1606/2002, this may mean compliance with UK or International Financial Reporting Standards.
3. Where breaches of the Act are discovered the Panel seeks to take corrective action that is proportionate to the nature and effect of the defects, taking account of market and user needs. Where a company’s accounts are defective in a material respect the Panel will, wherever possible, try to secure their revision by voluntary means, but if this approach fails the Panel is empowered to make an application to the court under section 245B of the Companies Act 1985 for an order for revision. To date no court applications have been made.
4. The Chairman of the Panel is Bill Knight and the Deputy Chairmen Ian Brindle and Ian Wright. There are currently 27 other Panel members drawn from a broad spectrum of commerce and the professions. Individual cases are normally dealt with by specially constituted Groups of 5 or more members.
5. All Press enquiries and consultation responses should be directed to: Carol Page on tel: 020 7492 2460 or email: c.page@frc-frrp.org.uk