The Financial Reporting Review Panel invites comments on Revised Operating Procedures

News types: Consultation Announcement

Published: 4 October 2011

FRRP PN 133

The Financial Reporting Review Panel (the Panel) today published  amendments to its operating procedures for public consultation (PDF). The proposed amendments do not involve any change in substance to the manner in which the Panel will conduct its enquiries.

The Panel proposes two amendments designed to improve the effectiveness and efficiency of the FRC in its regulatory functions and to permit publicity in all cases where Panel intervention results in significant change to a company’s financial reporting.

The key amendments raised in the consultation paper:

  • Allow for the Panel to share otherwise company-confidential information with the FRC’s Audit Inspection Unit (paragraph 49).

  • Reserve a right for the Panel to make an announcement in all cases where a company makes a significant change to its corporate reporting following Panel intervention (paragraphs 51-53).

  • Allow for the Panel to release its own announcement where the existence of a Panel enquiry has become public (paragraph 54).

There are also a number of drafting amendments and improvements.

The FRC Plan for 2011/12 published in April 2011 included a major project to work with Government to ensure that the FRC has the powers and structure necessary to carry out its responsibilities and consult on any changes. The changes on which the FRRP is now consulting will contribute to this wider initiative.

Notes to Editors

  1. The FRC is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.

  2. The role of the Panel is to examine the annual accounts and directors’ reports of public and large private companies to see whether they comply with the requirements of the Companies Act 2006 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 or directors’ report 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 456 of the Act 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 Chairs, David Lindsell and Joanna Osborne. There are currently 35 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.

Document created under a former FRC operating body.

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