The Financial Reporting Council (FRC), the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance, has today published a report on its work in the July-September quarter of 2007/08 and expected developments in the next quarter.

Principal developments during the July-September 2007 quarter include:

• Submission of a letter to the US Securities and Exchange Commission in support of its proposal to eliminate the requirement for a US GAAP reconciliation for issuers reporting under IFRS.
• Publication of a briefing paper by the ASB warning that proposals in the IASB’s recent discussion paper on insurance contracts might have consequences for financial reporting in other sectors, notably in matters concerning measurement of value where there is no market and revenue recognition.
• Establishment of an independent working group to produce guidance on the use of agreements to limit the liability of auditors of public companies, at the request of market participants.
• Initiation of a review by Board for Actuarial Standards (BAS) of the mortality assumptions in actuarial calculations.
• Extension of the FRC’s disciplinary responsibilities to cover actuaries, and a consequent change of name of its operating body to the Accountancy and Actuarial Discipline Board (AADB).
• Election of Paul Boyle, the FRC’s Chief Executive, as Chairman of the International Forum of Independent Audit Regulators (IFIAR) from September 2007.

Developments expected in the next quarter include:

• Publication of the findings of the FRC’s review of the Combined Code on Corporate Governance together with proposed changes to the Code – if there are any. If any changes are proposed there will be a separate consultation.
• Publication of the final report of the Market Participants Group on choice in the UK audit market. The FRC will issue an update on the project setting out its response to the MPG’s final report and how the MPG’s recommendations will be implemented.
• Publication of the responses to the “Promoting Audit Quality” discussion paper together with the analysis and summary of next steps.
• Production of draft guidance on the use of agreements to limit the liability of auditors of public companies by the independent working group, with a view to public consultation in the first quarter of 2008.
• Publication by the FRC of a statement on the “true and fair” view, in the light of new accounting and auditing standards.
• Publication of the Financial Reporting Review Panel's priority sectors for 2008/09.
• Launch of consultation on a draft conceptual framework for actuarial standards by the BAS.
• Announcement of the Non-Executive Directors of the new FRC Board.
• Issue of a consultation paper on opportunities to improve the cost effectiveness of those parts of the regulatory system for which the FRC is responsible.

FRC Chief Executive, Paul Boyle, said:

“This is the second of our quarterly reports which is structured around the Strategic Framework we published in April. We are progressing well on implementing the projects included in our Plan for 2007/08, working closely with our wide range of stakeholders.”

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance.
2. The FRC’s 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 Council. The Committee on Corporate Governance, whose members are drawn from the Council, assists it in its work on corporate governance.
3. The FRC published its Strategic Framework and Plan for 2007/08 on April 30.
   
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   Ian Rodger
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   i.rodger@frc.org.uk