News July 2017 Financial Reporting Council publishes Annual Report for 2016/17

Financial Reporting Council publishes Annual Report for 2016/17

19 July 2017
PN 32/17
The Financial Reporting Council’s (FRC) Annual Report for 2016/17 (PDF) highlights the delivery of priority projects and actions taken by the regulator.

During the year the FRC was designated the Competent Authority for audit in the UK and established the regulatory framework for that role. The FRC also published its report ‘Corporate Culture and the Role of The Board’, issued revised technical actuarial standards and made improvements to resolve enforcement cases more quickly. Changes in the external environment led to the creation of Stakeholder Panels to help input to the debate on corporate governance and review the consequences of exiting the EU. 

The report outlines the FRC’s financial position, achievements, and challenges and details the progress made in the 2016/19 strategy. Financially in 2016/17, The FRC operated within its published budget and made a number of efficiency savings.

The UK’s corporate governance framework is globally renowned and is a key reason why global investors commit their capital to UK listed companies. The UK Corporate Governance Code’s ‘Comply or Explain’ approach has allowed the FRC to respond effectively to evolving market circumstances, benefiting UK society in the long-term through jobs, growth and prosperity. Over the coming year there will be a focus on enhancing corporate governance to maintain the UK’s leadership in this area.

Furthermore, during the next strategic period, the FRC will review its mission to ensure its work adequately reflects the expectations of all stakeholders.  Among its work on key areas, it will continue to promote the importance of audit quality, Clear & Concise reporting and effective stewardship while supporting companies with the implementation of the new framework for Technical Actuarial Standards.
Sir Win Bischoff, Chairman FRC said,

“The need for trust in British business, to secure the investment we need from within the UK and internationally becomes even more important post Brexit.  Our role contributes to businesses driving long-term success for all stakeholders, including very importantly shareholders, customers, employees and pension savers.  We have strengthened our own links with a wider group of stakeholders to support effective policy-making in the public interest and are adapting our mission to reflect a wider public interest.

We have announced a review of the UK Corporate Governance Code. 

Public confidence in business depends not just on regulations and codes but on companies being held to account if they transgress.  This year the FRC has concluded a number of substantial audit enforcement cases, and improved the speed of enforcement action.  However, there are gaps in our enforcement powers, particularly in relation to our ability to take action against directors who are not accountants.  We have engaged with the Government, and stand ready to enhance our role if greater powers are conferred to rectify this.”

Watch the video of key points from the report.
Notes to editors:

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