FRC on track to become a new, more resilient regulator

News types: Codes and Standards Announcements

Published: 8 April 2021

The Financial Reporting Council (FRC) has today published its Strategy for 2021/22 after a period of consultation in which respondents expressed broad support for the FRC’s progress towards the new Audit, Reporting and Governance Authority (ARGA).

The Government has published its proposals for restoring trust in audit and corporate governance . These proposals include the establishment of a new statutory regulator to replace the FRC. The FRC’s plan takes into account the Government’s stated intentions for the statutory objectives and governance of ARGA and its proposals to fund the new regulator through a statutory levy. It also takes further steps towards the growth that will be required to deliver new or enhanced regulatory activities.

The objectives and work programme set out in the strategy reflect the FRC’s continued commitment to serve the public interest and deliver the existing responsibilities whilst also modernising and moving towards becoming ARGA – by early adoption of new functions and enhanced organisational resilience, both of which will stand ARGA in good stead for its commencement. As part of the process, and reflecting feedback to the consultation, FRC will develop for publication a three year forward plan and further measures to report the progress and impact of our strategy.

The FRC’s core objectives are:

  • To set high standards in corporate governance and stewardship, corporate reporting, auditing and actuarial work, and assess the effectiveness of the application of those standards, enforcing them proportionately where it is in the public interest.
  • To promote improvements and innovation in the areas for which we are responsible, exploring good practice with a wide range of stakeholders.
  • To influence the development of international standards, including for climate and wider ESG reporting by engaging in the global regulatory and standard setting communities, to ensure that they are informed by stakeholder demands for high quality, consistent and comparable information that is robustly assured.
  • To promote a more resilient audit market.
  • To transform the organisation into a new robust and independent regulator, acting in the public interest.

Sir Jon Thompson, CEO FRC said:

“The FRC’s intention is to create an organisation which is ready to become ARGA as soon as the legislation permits, whilst becoming increasingly effective and resilient. We are pleased with the Government proposals and are in close contact with them to manage the next stages of the reform process following the period of consultation.”

Notes to editors:

The FRC’s purpose is to serve the public interest by setting high standards of corporate governance, reporting and audit and by holding to account those responsible for delivering them. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.

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