FRC publishes 2020/21 strategy for reform
23 March 2020
The Financial Reporting Council (FRC) has today published its strategy for 2020/21
following positive responses to its consultation. The FRC is promoting a more resilient audit market and will develop its longer term strategy once the Government has finalised its position on key public policy issues related to the audit market.
The FRC has a new purpose - serving the public interest by setting high standards of corporate governance, reporting and audit and by holding to account those responsible for delivering them. To meet this its core objectives are:
- To set high standards in corporate governance and stewardship, corporate reporting, audit and actuarial work and assess the effectiveness of the application of those standards, enforcing them proportionally where it is in the public interest.
- To promote improvements and innovation in these areas, exploring good practice with a wide range of stakeholders.
- To transform the organisation into a fit-for-purpose, independent regulator.
The FRC has already implemented over 20 of the 83 recommendations set out in the independent review of the FRC with over 35 more in progress. In the remaining areas primary legislation is required to create the new regulator, the Audit, Reporting and Governance Authority (ARGA) and to give it formal powers. The FRC has begun preparatory work in these areas.
On the CMA review of the Audit Market the FRC has been working with BEIS to bring forward solutions for Ministers and awaits decisions on this in due course.
In respect of the Brydon review, preparatory work has begun on all of the recommendations and the FRC is again engaged with BEIS on the potential for their implementation.
A Government response during 2020 is awaited to provide clarity on the way forward, potential legislative change and a timetable for implementation.
Sir Jon Thompson, Chief Executive of the FRC, said:
“The FRC is facing a period of significant and sustained change. This strategy ensures we can begin to deliver market and regulatory reforms to promote long term confidence among investors and other stakeholders as the UK itself embraces a new economic and political reality. We are in close contact with the Government to manage the next stages of the reform process.”
A link to the strategy can be found here