FRC resolves record number of enforcement cases
News types: Guidance, Inspection, Investigations, Operating Procedures, Policies and Responsibilities, Statements
Published: 27 July 2023
The Financial Reporting Council (FRC) has today published its latest Annual Enforcement Review which reveals that a record number of cases were resolved in the year 2022/23, with financial sanctions of £40.5m imposed.
The year saw the FRC’s highest ever sanction of £20 million (imposed by the Independent Tribunal) in a case which underscores the seriousness of providing deliberately misleading information to the FRC’s inspections team.
The FRC’s ongoing commitment to timely enforcement action is reflected in year-on-year improvements in the published KPI over the last five years with 75% of cases meeting the KPI in 2022/23. This reflects the maturity of changes implemented over the period including growth in the Enforcement Division’s headcount and methods of honing case focus such as the introduction of in Division specialist senior audit expertise.
The report highlights and welcomes the growing commitment to self-improvement and cooperation demonstrated by subjects of Enforcement investigations this year which is essential to embedding quality improvements and has resulted in discounts in headline financial sanctions ranging from 25-43%.
The FRC’s Executive Director of Enforcement, Elizabeth Barrett said:
- Record number of cases resolved with 19 cases concluded in the last year
- Financial sanctions of £40.5m imposed, including highest-ever sanction of £20m
- Significant improvement in timeliness with 75% of cases meeting KPI
“The record number of cases concluded this year reflects the strengthened capability and determination of the FRC to hold firms and individuals to account for serious accounting and audit failures.
"Timeliness has been a key priority over the last five years and significant ongoing improvements in this area are recorded in this year’s review.
“While higher financial sanctions are an important marker of the seriousness of the failings, non-financial sanctions continue to play a key role in driving improved behaviour and outcomes to deliver long-term positive change.