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The Financial Reporting Council is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment. We promote high standards of corporate governance through the UK Corporate Governance Code. We set standards for corporate reporting and actuarial practice and monitor and enforce accounting and auditing standards. We also oversee the regulatory activities of the actuarial profession and the professional accountancy bodies and operate independent disciplinary arrangements for public interest cases involving accountants and actuaries. We believe that there are strong connections between the issues of corporate governance, auditing, actuarial practice, corporate reporting and the professionalism of accountants and actuaries. We believe that the breadth of our responsibilities and functions will enhance our effectiveness.
The FRC is an independent regulator, delegated powers by the Secretary of State for Business, Innovation and Skills. We cooperate widely with partner organisations including the Bank of England and Financial Services Authority.
 Accounting and Reporting Policy  

The role of the ARP is to oversee the financial reporting requirements for UK entities other than those required to or choosing to apply International Accounting Standards.  This is done by maintaining and improving UK Financial Reporting Standards (FRS) and influencing the development of international standards.  The ARP achieves this by collaborating with accounting stand-setters from other countries and the International Accounting Standards Board (IASB). 


Accounting standards apply to all entities that prepare accounts that are intended to provide a true and fair view. The Foreword to Accounting Standards explains the authority, scope and application of accounting standards.


The ARP's policy is to consult widely on all its proposals. Generally the development of a new accounting standard involves at least two formal consultation documents, a Discussion Paper and a Financial Reporting Exposure Draft (FRED).


The ARP is recognised in its role of issuing accounting standards in the Companies Act 1985; revised 2006.
The ARP published the Financial Reporting Standard for Smaller Entities (FRSSE) in June 2008.  The FRSSE 2008 version reflects changes in company law arising from the Companies Act 2006.  The FRSSE applies to accounting periods beginning on or after 6 April 2008; the date from which the accounting and reporting regime for smaller companies in the Companies Act 2006 become effective.
The ARP collaborates with accounting standard-setters from other countries and the International Accounting Standards Board (IASB) to influence the development of international standards.  The ARP has a communication strategy that sets out the Board's objectives in using communications for influencing international developments and dialogue with its constituents.


The FRC is a non-voting observer of EFRAG and works with EFRAG and other European Union (EU) standard setters to encourage high quality in the IASB's standards and their adoption in the EU. 


 Audit and Assurance  

The Audit and Assurance Team contributes to the achievement of the Financial Reporting Council's fundamental aim of supporting investor, market and public confidence in the financial and governance stewardship of listed and other entities by setting high quality standards and guidance. 


The Audit and Assurance team achieves its aims by establishing auditing standards which set out requirements which external auditors in the United Kingdom and the Republic of Ireland are required to comply with.  


Before publishing or amending an auditing standard or any other standard, the Audit and Assurance team publishes an exposure draft on its website and allow at least three months, unless circumstances require a shorter period, for representations to be made on it. Where publications cause changes to be made to other previously-issued publications, any such consequential changes are exposed for comment simultaneously.
Comment letters received in response to exposure drafts and consultations, and the related feedback statement, can be accessed via the page relating to the particular exposure draft or consultation which can be found by searching in our publications area.


In 2009 the Audit and Assurance team adopted the International Standard on Quality Control 1 (ISQC 1) and virtually all of the International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB) for application to audits of financial statements for periods ending on or after 15 December 2010.  Where necessary, the Audit and Assurance team has augmented the international standards with additional requirements to address specific UK and Irish legal and regulatory requirements and with additional guidance that is appropriate in the UK and Irish national legislative, cultural and business context.  In the published versions of the standards, this additional material is clearly differentiated from the original text of the international standards by the use of grey shading. 


The Audit and Assurance team does not deal with questions or complaints about specific audits or auditors.  If you want to make a complaint about the professional conduct of a registered auditor you should, in the first instance, bring your concerns to the attention of the senior partner of the firm concerned.  Many firms of auditors have formal complaint review procedures.  If you are still not satisfied, you should contact the professional body of which the individual or firm is a member.


 Actuarial Policy  
 Corporate Governance  

 Professional Discipline  

The Professional Discipline team, which sits under the FRC's Conduct Committee is the independent, investigative and disciplinary body for accountants and actuaries in the UK. The Conduct Committee is responsible for operating and administering an independent disciplinary scheme (the Accountancy Scheme) covering members of the following accountants' professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy and the Institute of Chartered Accountants in England and Wales; The Institute of Chartered Accountants of Ireland and the Institute of Chartered Accountants of Scotland.


The Accountancy Scheme and Regulations and the Actuarial Scheme and Regulations contain the detailed rules setting out how cases are dealt with by the Professional Discipline team.
In the first instance complaints about accountants or accountancy firms should be made to the accountancy body of which the accountant or the firm is a member. Complaints about actuaries should be made to the Institute and Faculty of Actuaries. Matters which raise serious issues affecting the public interest will be referred to the Professional Discipline Team by the accountants' and actuaries' professional bodies. The Conduct Committee will then decide whether to investigate the matter. If it decides that a matter should be investigated, it will be referred to the Executive Counsel. The Conduct Committee may also decide of its own accord to investigate a matter without it having been referred to it by one of the accountants' or actuaries' professional bodies.
The Executive Counsel will conduct the investigation and decide whether or not any accountant or accountancy firm or actuary should be subject to disciplinary proceedings. In making this decision, the Executive Counsel acts independently.
If disciplinary proceedings are to be commenced, the Executive Counsel will file a complaint with the Conduct Committee and they will appoint a Disciplinary Tribunal to hear the case.

The Executive Counsel has the power to require the participating accountants' professional bodies to provide him with documents relevant to any particular matter. He may also seek information and documents from accountants and accountancy firms and require them to give evidence to a tribunal. If any accountant or accountancy firm fails to comply with any such request, this would be grounds for disciplinary proceedings. The Executive Counsel has similar powers under the Actuarial Scheme in respect of actuaries but not in respect of actuary firms.


Complaints will be decided by Disciplinary Tribunals which will be composed of either three or five suitably qualified people drawn from a Panel of Tribunal members maintained by the Professional Discipline team. The Chairman of the Tribunal will always be a lawyer. In a three-person Tribunal there will also be one lay person and one accountant or actuary (or two lay persons and two accountants or actuaries in a five person Tribunal). A majority of the Tribunal will always be non-accountants or non-actuaries. To ensure their independence, no member of a Tribunal should be an officer or employee of any of the accountants' or actuaries' professional bodies or of the FRC or any of its operating bodies including the Conduct Committee.


An accountant, accountancy firm or actuary can appeal any finding against it to an Appeal Tribunal. A retired judge or a senior barrister will first consider any appeal. If he or she gives leave to appeal, the appeal will be heard by an Appeal Tribunal which will be set up by the Conduct Committee in the same way and subject to the same criteria as the Disciplinary Tribunal which heard the original complaint.


Yes. A majority of the Conduct Committee members and its chairman are non-accountants or non-actuaries. The tribunals and appeal tribunals will be composed of a majority of non-accountants or non-actuaries. No officers or employees of any of the accountancy or actuarial bodies, the FRC or any of its subsidiary bodies may be appointed to a tribunal.


 Professional Oversight  

The Professional Oversight team is one of the teams which comprise the Conduct Division of the FRC.  It contributes to the achievement of the Financial Reporting Council's own fundamental aim of promoting high quality corporate governance and reporting to foster investment by:
  • independent oversight of the regulation of the auditing profession by the recognised supervisory and qualifying bodies;
  • monitoring the quality of the auditing function in relation to economically significant entities;
  • independent oversight of the regulation of the accountancy profession by the professional accountancy bodies;
  • independent oversight of the regulation of the actuarial profession by the professional actuarial bodies and promoting high quality actuarial work; and
  • independent supervision of the Auditors General in respect of the exercise of their function as statutory auditors.
If you want to make a complaint about the professional conduct of an accountant, registered auditor or actuary, you should, in the first instance, bring your concerns to the attention of the senior partner of the firm concerned. Many firms of accountants and actuaries have formal complaint review procedures. If you are still not satisfied, you should contact the professional body of which the individual or firm is a member.
The FRC has formal oversight responsibilities under the Companies Act 2006 in relation to statutory audit.  This includes ensuring that those accountancy bodies recognised to supervise auditors (Recognised Supervisory Bodies) and audit firms have effective arrangements for the investigation of complaints against their members and member firms who are eligible for appointment as a statutory auditor, and against the body itself in respect of any matter arising from its functions as a supervisory body.
You should first pursue the matter with the relevant body, most of whom also have a system of independent review or other process to consider the way they have handled a complaint. If you are not satisfied with the application of the process you can draw your concerns to the attention of the FRC who will consider them as set out below.
We aim to acknowledge all complaints within 10 working days of receipt. At that time we will notify you if your complaint does not fall within our remit. If a complaint does not fall within our remit, we will try and suggest organisations that may be able to assist with your complaint. We will also advise you if your complaint does not raise concerns that a professional accountancy or actuarial body has breached significantly its own standard procedures in the handling of your complaint about their member.
The Freedom of Information Act (FOIA) was passed on 30 November 2000. It gives a general right of access to information held by public authorities, sets out exemptions from that right of access and places a number of obligations on such authorities. The Companies Act 2006 (section 1252(3)) provides that the FRC is designated as a public authority in respect of the statutory duries delegated to it by the Secretary of State under Part 42 of Companies Act 2006.
An audit entity must register with the FRC if it audits the annual or consolidated accounts of a company incorporated outside the European Union/European Economic Area whose transferable securities are admitted to trading on a regulated market in the United Kingdom. However:
  1. no registration is required if the company is an issuer exclusively of debt securities within the meaning of Article 2 (1) (b) of the Directive, the denomination of which is at least EUR 50,000* per unit or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least EUR 50 000.
  2. no registration is required under the current legal framework in the United Kingdom if the audit entity is a registered auditor in the United Kingdom or is approved in accordance with the Audit Directive by an EEA competent authority to carry out audits of annual accounts or consolidated accounts required by Community law.

There is a register of all countries that are registered with the FRC at:
Register of Third Country Auditors
Sections 522 to 525 of the Companies Act 2006 set new requirements on auditors and on companies to notify the “appropriate audit authority” when an auditor ceases to hold office.  It is important to stress that both auditors and companies need to notify the “appropriate audit authority” and that there are significant differences in the detailed requirements on auditors and on companies.  
The primary responsibility for regulating audit firms lies with the Recognised Supervisory Bodies (RSBs). The FRC's role is an oversight role whereby we monitor the RSBs to ensure that they are able to meet their statutory responsibilities and exercise their regulatory functions effectively. 
A RQB is a Recognised Qualifying Body. Individuals responsible for audit at registered firms must hold an audit qualification from a RQB. 
A RSB is a Recognised Supervisory Body. Audit firms who wish to be appointed as a statutory auditor in the UK must be registered with, and supervised by, a RSB. 
An accountant may offer a wide range of accountancy and related services (for example: accounts preparation, tax advice, payroll). However, only those accountants who are also registered as auditors are entitled by law to provide statutory audit services, most commonly the audit of limited companies.
We exercise oversight by checking that each body has effective arrangements in place to meet all the statutory requirements for continued recognition, and making recommendations; reviewing and testing the way in which each body’s regulatory systems are applied in practice, and making recommendations; and evaluating the effectiveness of an aspect of the regulatory system, for example complaints handling, audit monitoring or examinations and making recommendations.
 Audit Quality Review  

The Audit Quality Review (AQR) is responsible for the monitoring of the audits of all listed and other major public interest entities. The audits of all UK incorporated companies with listed securities (both equity and non-equity securities) and other entities in whose financial condition there is considered to be a major public interest are within the scope of the AQR’s work. A description of such entities is issued annually (“Scope of Independent Inspection”). The audits of certain companies incorporated in Jersey, Guernsey and the Isle of Man whose shares are admitted to trading on a regulated market in the EEA are also subject to inspection by the AIU under separate arrangements agreed with the relevant regulatory bodies.


The AQR issues confidential reports on individual audits reviewed by the AQR to the relevant audit firms. The firms are expected to provide copies of these reports to the directors of the audit clients concerned. 


The key issues arising across the AQR’s reviews of individual audit engagements, and those arising from its review of firm-wide procedures, are set out in a private report on each major firm to the audit registration committee of the professional body with which the firm is registered (the ICAEW in the case of the Big 4 audit firms; the ICAEW or the ICAS for other major firms). These reports are discussed with the firms at a senior level before they are finalised. In addition, individual reports on the AIU’s inspections of major firms are published on the FRC’s website.       
The AQR’s overall Annual Report provides an overview of the inspection and other activities undertaken each year, including its inspections of smaller firms, and the principal findings arising. 


The AQR reviews approximately 100 audits each year.  The AQR has developed a risk model covering listed companies, including AIM, which it uses to inform its selection of audits to be reviewed each year. The majority of audits selected for review by the AQR are drawn from those identified as higher risk within its risk model.


The AQR reviews selected areas of the audit work performed. It applies a risk-based approach in selecting these areas, taking into account areas of particular focus identified at the start of the inspection year and identified risks specific to the individual audit concerned. 


 Corporate Reporting Review/ Financial Reporting Review Panel  

First of all you need check that the complaint falls within the Panel's remit (Operating Procedures).  Details for contacting the Panel are set out on the contact page.  It is important to set out your complaint clearly, referring where possible to a specific breach of accounting or reporting rules.
You can call to check if a matter is likely to fall within the CRR's remit, but a written explanation will avoid misunderstanding. You can call to check on the progress of a case. The CRR Team cannot give out information while a case is going on and will write to you when it is finished.


Possible breaches of accounting rules or failure to make disclosures required by the Companies Act or accounting standards.


The financial accounts and directors’ reports of UK public companies, large private companies and certain overseas companies listed on a UK market. This includes both interim and final accounts, but NOT press releases, trading statements, etc.


No. Anyone can make a complaint against a company.


The Panel operates confidentially as set out in its Operating Procedures. The Panel does not normally disclose how a matter at issue came to its attention, nor does it reveal the identity of any complainant. In addition, the Panel is a Prescribed Person under the Public Interest Disclosure Act 1998, which provides additional protection for complainants in some circumstances.


The complaint is reviewed by Panel staff who draw up a recommendation for the Chairman and Deputy Chairmen. If they decide that there is, or may be, a question of whether a report complies with relevant accounting or reporting requirements then either a formal enquiry will be opened or the Panel will write to the company Chairman seeking further information. In the course of its review, the Panel may find other issues which it may wish to raise with the company.


There are a number of reasons why this might be the case. The entity that is the subject of the complaint may not be a company that falls within the Panel's remit or the complaint itself may not fall within the Panel's scope (Operating Procedures). Where possible, if a case does not fall with the Panel's remit, it will direct you to another more appropriate authority.


On receipt of a complaint, Panel staff will carry out a review for indications of potential breaches of relevant accounting or reporting requirements. A preliminary analysis with a recommendation as to a course of action is provided to the Chairman and Deputy Chairmen who then make a decision on whether or not to proceed with the case. A decision to proceed will generally result in a letter to the company asking for further information. This does not constitute a formal enquiry. Sometimes, a company's reply will satisfactorily deal with the matters at issue, but where it does not, a decision may be taken to open a formal enquiry. 


The Panel does not notify a complainant of the progress of the case, as this would result in a breach of its duty of confidentiality to the company. The Panel will inform the complainant only when it reaches the end of its investigation or enquiry. At that stage, the complainant will be informed of the outcome of the case. If a press notice is issued, the complainant will be sent a copy.


A formal enquiry is begun when the Chairman and Deputy Chairmen decide that there may have been a potentially significant breach of accounting or reporting requirements. This will usually be after an initial round of correspondence with a company, although, in exceptional circumstances, a formal enquiry may be opened straight away. In order to commence a formal enquiry, a Panel Group is set up. The Group then decides whether to proceed with the enquiry.


A Group is appointed by the Chairman and consists of five or more Panel members, usually including the Chairman and one of the Deputy Chairmen.


A full list of current Panel members can be found at Panel Members. Panel members are qualified accountants or lawyers who specialise in company law and who hold or have held senior positions in their chosen field. They may be, or may have been, in practice, in the public sector or in industry, for example as a senior partner in a major accounting firm or as Finance Director of a FTSE 100 company. They are recruited by public advertisement. Other than the Chairman and Deputy Chairmen, they are unpaid. The underlying principle is that companies are reviewed by their peers. This ensures that the Panel's approach takes note of business considerations and is sensible and practical.


No. In order to maintain confidentiality, the Panel is not able to discuss a case that is in progress, even with the complainant. If the Panel, or any member of the Group, needs further information then the Panel will contact you, usually in writing, to ask for further information or clarification. The Panel prefers that communication should be in writing in order to preserve a proper audit trail and to avoid misunderstandings.


The Panel will explain in its letter to you why it has decided to take no further action but will not enter into any further discussion about its decisions. Your complaint will have been carefully considered. If the Panel thinks that it might be appropriate for you to contact any other authority, it will tell you.


The FRC has a complaints procedure for anyone who comes into contact with a part of the FRC, such as the Panel, and who is unhappy or dissatisfied about the way the relevant part of the FRC has exercised or failed to exercise its functions. Full details of the procedure are set out under Procedure for complaints about the FRC on the FRC’s own website.
The Panel selects accounts for review in a number of ways (see "How the Panel works") and includes a control group within its sample. In many cases, no question of substance arises from a review of the published accounts. In others, questions are resolved by explanation from the company. In a number of cases, the company agrees to improve its disclosures or accounting in the future. The Panel only issues a press notice where a significant correction to published accounts is being made or where there is a case that the Panel considers otherwise merits publicity.
The Panel's powers are restricted to seeking the correction of defective accounts. Likely outcomes include the Panel issuing a press notice setting out its conclusions in a case, the reasons for those conclusions, and the corrective action that has been agreed with the company. In other cases, the Panel may accept corrective action by a company without the issue of a press notice. Where appropriate, the Panel can refer its findings to other relevant bodies, such as the FSA, the FRC's Professional Discipline Team or a professional institute.
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