Related Articles
FRC Enforcement – A Year in Review 2023/2024
25 September 2024
In many ways, the Financial Reporting Council’s (“FRC”) 2023-2024 Annual Enforcement Review (the “AER”), presents many similar themes to the previous year. That is perhaps unsurprising given, until recently, the slow progress on audit reform, and that 2023 2024 itself displayed similar hallmarks to the prior year, with businesses continuing to deal with significant uncertainty and pressure remaining on the UK markets to appeal to investors.
Auditors in the spotlight as the FCA takes action
28 August 2024
The FCA recently exercised its (to-date unused) power to impose penalties upon auditors exercised not once, but twice, in the same week, in respect of two separate rule breaches.
What do the FRC’s revised Ethical Standard and new ORITP Guidance mean for auditors?
20 March 2024
The FRC have published the revised Ethical Standard for auditors, along with new guidance on the Objective, Reasonable and Informed Third Party test. Read here to find out more about what these changes mean in practice.
Private company reports: FRC urges greater clarity and conciseness
6 February 2024
The Financial Reporting Council has published a thematic review of reporting by the UK’s largest private companies.
FRC calls for more outcomes-based reporting
21 November 2023
The Financial Reporting Council has published its latest annual review of corporate governance reporting. The review outlines areas where the FRC would like to see improvement as well as giving examples of good reporting and insights into corporate governance trends.
FRC abandons some but not all changes to UK Corporate Governance Code
7 November 2023
The Financial Reporting Council has changed its approach to proposed changes to the UK Corporate Governance Code following concerns raised in feedback. It will push ahead with reforms on internal controls but these will be changed to reflect feedback and to ensure that UK listed companies do not end up with a “Sox lite” regime.
What does the FRC’s latest Audit Quality Review mean for audit supervision and enforcement?
18 July 2023
The FRC has published its 2022/23 annual review of audit quality for Tier 1 firms. The review demonstrates an overall improvement in audit quality at the largest audit firms but highlights areas of continuing inconsistency across audits.
FRC proposes update to the UK Corporate Governance Code to strengthen internal controls
30 May 2023
The Financial Reporting Council has launched a public consultation on revisions to the UK Corporate Governance Code. This is the FRC’s contribution to the reforms outlined by the government in its response statement published last year to the 2021 White Paper on restoring trust in audit and corporate governance. The most significant proposed changes affect the section of the Code dealing with audit, risk and internal control.
Boards to be more accountable for internal controls under new UK Corporate Governance Code
22 January 2024
The Financial Reporting Council has published a new edition of the UK Corporate Governance Code.
The new Code is intended to strengthen boards’ accountability for monitoring and reporting on internal controls. The FRC is aiming to avoid a prescriptive US-style regime and to retain flexibility and proportionality, with an eye to helping the competitiveness of UK equity markets.
FRC Enforcement - A Year in Review
29 August 2023
In its Annual Enforcement Review for 2023, the Financial Reporting Council reflects on its enforcement activity over the previous 12 months, identifying themes arising in audit investigations and reporting on the action it has taken to incentivise positive behaviours.
In this publication we share our thoughts on key themes emerging from the review, including how the FRC’s approach to enforcement compares with previous years. We identify the trends that have emerged from recent enforcement actions and present our expectations of what is to come in 2024.
FRC consults on revisions to ethical standards: Enhancing integrity, objectivity and independence
21 August 2023
The Financial Reporting Council (FRC) has issued a consultation on revisions to its Ethical Standard in a bid to enhance and clarify the principles of integrity, objectivity and independence that auditors must follow. The changes demonstrate the FRC’s continued focus on ensuring that the principles of integrity, objectivity and independence remain embedded in the audit industry.
Key highlights from the FRC’s latest Annual Enforcement Review
2 August 2023
The FRC has published its Annual Enforcement Review for 2023. The review paints a complex picture, with record fines contrasting against a reduction in the number of cases opened and an overall drop in the FRC’s case load. We will shortly be publishing our own review of the key audit and accountancy enforcement themes emerging from the last year and likely trends and areas of enforcement focus to come. In the meantime, we have published a short summary of the key points of note.
The FRC outlines its Approach to Audit Supervision
27 June 2023
The FRC has published a report on its ‘Approach to Audit Supervision’. The report updates the previous version of this publication and develops on the FRC’s aim for greater transparency by outlining their current approach to audit supervision and the expectations placed on firms. The report also sets out the FRC’s future priorities, which include a greater focus on assessing audit firms’ implementation of new auditing standards, as well as the FRC’s development of a new tool to aid the FRC in providing bespoke input to audit firms, outside of the formal supervision process.
Investigations Insights
27 June 2023
Welcome to the Investigations Insights podcast. In this podcast series, thought leaders and subject matter experts from our cross-practice Investigations network explore some of the challenges and complexities that specialist investigations work can present, and share best practice and guidance.
FRC – what’s next for ESG activities
12 February 2023
The Financial Reporting Council has published an update on its work to support high quality and comparative Environmental, Social and Governance reporting and disclosures. The latest statement sets out available resources and a reminder of work in progress where there are still ongoing challenges in ESG reporting.
FRC releases revised 3-year plan following delayed ARGA transition
6 January 2023
The FRC has announced a revised 2023-26 Draft 3 Year Plan which sets out its revised priorities for the next three years and how it will achieve them. This is the second three-year plan published by the FRC in 2022, following the previous 2022-25 3-Year Plan released on 5 April 2022. Whilst the revised plan re-affirms the FRC’s intentions to transition to the Audit, Reporting and Governance Authority (“ARGA”), the anticipated date for the transition has been pushed back from 2023 to 2024, reflecting delays to the necessary legislation to create ARGA.
FRC publishes more information on ARGA’s competition powers and invites feedback
13 December 2022
The FRC have published a policy paper that sets out further information on the regulator’s approach to competition in the audit market as it prepares to become the Audit, Reporting and Governance Authority (ARGA).
FRC publishes guidance on what makes a good environment for auditor scepticism and challenge
30 November 2022
The FRC has published a paper setting out the principal attributes of a good audit environment that facilitates professional scepticism and challenge. "What Makes a Good Environment for Auditor Scepticism and Challenge" marks the latest addition in the FRC's ‘What Makes a Good…’ series; following the FRC's ‘What Makes a Good Audit’ published in November 2021. As with the previous paper in the series, the FRC's latest guidance largely codifies existing good practice rather than presenting a significant shift in expectations.
The FRC sets out principles for ARGA's public interest test
21 November 2022
The FRC has published the set of principles that its replacement regulator the ARGA will use when assessing whether it is in the public interest for it to take regulatory action. This 'public interest test' will help ARGA shape its regulatory perimeter, impacting the types of regulatory action taken by the regulator, including supervisory engagement and enforcement actions. Public interest considerations are not new to the FRC’s decision-making, so query whether this reformulation will lead to a significant change in approach.
FRC provides insights into potential future areas of challenge
21 November 2022
The FRC has published its Annual Review of Corporate Reporting for 2021/22. The report summarises the findings arising from the review of 252 reports and accounts by the FRC's Corporate Reporting and Review (CRR) team, identifying areas for improvement and its expectations for the coming reporting season.
Government confirms plans for audit and corporate governance reform
9 June 2022
The UK government has set out its plans for reform in a response to its White Paper on restoring trust in corporate governance and audit. These include: new corporate reporting obligations, including statements on fraud measures, dividend and distributable reserves disclosures, a resilience statement and an audit and assurance policy; measures to improve competition in the audit market which will particularly affect FTSE 350 companies; and stronger enforcement powers over company reporting by the new regulator, the Audit, Reporting and Governance Authority (ARGA).
