FRC issues draft Auditor Regulatory Sanctions Procedure: Sanctions Guidance for consultation
News types: Consultation Announcement
Published: 12 June 2013
PN 057
The FRC has today (12 June 2013) published its consultation paper on Sanctions Guidance (PDF). One of the FRC’s key goals has been to enhance auditor performance by instituting a new regime for the independent sanction of poor audit work. This draft paper follows a consultation in December 2012 on the proposed Auditor Regulatory Sanctions Procedure which set out how the FRC’s new regulatory regime will operate.
The FRC recognises that such sanctions should be based on clear guidance to promote consistency and fairness. The Guidance for consultation sets out an approach for Committees and Tribunals when determining the appropriate sanctions that is flexible and allows for the exercise of discretion. The Sanctions Guidance proposes a principles based rather than a tariff based approach.
FRC CEO Stephen Haddrill said:
The FRC has today (12 June 2013) published its consultation paper on Sanctions Guidance (PDF). One of the FRC’s key goals has been to enhance auditor performance by instituting a new regime for the independent sanction of poor audit work. This draft paper follows a consultation in December 2012 on the proposed Auditor Regulatory Sanctions Procedure which set out how the FRC’s new regulatory regime will operate.
The FRC recognises that such sanctions should be based on clear guidance to promote consistency and fairness. The Guidance for consultation sets out an approach for Committees and Tribunals when determining the appropriate sanctions that is flexible and allows for the exercise of discretion. The Sanctions Guidance proposes a principles based rather than a tariff based approach.
FRC CEO Stephen Haddrill said:
“In publishing for consultation both the Sanctions Procedure, and this following Guidance, the FRC is one step closer to enhancing the value and impact of its audit monitoring activities. By sanctioning poor quality audit work we can further encourage firms and individuals to produce top quality audits and enhance trust in the audit profession. This new Guidance sets out a clear approach for Committees and Tribunals that ensures transparency and consistency in administering sanctions.”
Responses should be sent by Wednesday, 10 July 2013 at the latest to [email protected].
Notes to editors:
- The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We also monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
- The possible range of sanctions under the procedure are:
- Restrictions and/or Conditions;
- Regulatory Penalty – a fine of an amount determined by the Committee or Tribunal;
- Suspension of Registration; or
- Withdrawal of Registration.