FRC issues its Plan and Budget for 2014/2015
News types: Generic Announcement, Policies and Responsibilities, Policy Statements, Publications
Published: 22 April 2014
The FRC is grateful to those who responded to its consultation on the Plan. Taking account of the comments received it intends in 2014/15 to focus on the following projects:
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Promoting better quality in the audits of banks and building societies.
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Encouraging greater clarity and concision in corporate reporting, including cutting unnecessary clutter.
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Encouraging better quality reporting by smaller listed companies to enhance investor confidence and their potential for growth.
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Promoting more extensive engagement between fund managers and owners with company boards.
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Ensuring effective implementation of major changes to audit tendering, audit committee reporting and the audit report.
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Extending audit inspections to deliver on the recommendations of the Competition Commission.
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Reviewing the framework of actuarial standards, including in the light of new mapping of actuarial risk.
In addition the FRC will continue to work closely with EU institutions to promote justifiable confidence in the UK’s regulatory framework and influence the thinking of the IASB and the IAASB. In particular it will focus on encouraging the IASB to put more weight on prudence and relevance in the development of accounting standards.
FRC CEO Stephen Haddrill said:
“Across all its activities the FRC seeks to act in the public interest. The Plan sets out an agenda aligned with the need to maintain confidence in the UK’s governance and reporting and so underpin competitiveness in world markets and contribute to growth.
Parliament has given companies the privilege of limited liability. In return the public has a right to expect high standards of accounting and reporting, supported by effective independent audit. Our Plan sets out a work programme that we hope will enhance confidence in this system and that will help bring forward investment to underpin growth and prosperity. “
Budget
The FRC faces considerable pressures on its budget. In particular, to deliver on the Competition Commission proposals the number of audit inspections will increase by 25 per cent in 2014/15, and the FRC needs to prepare for further significant increases over the following two years. The costs for this activity and the FRC’s disciplinary work, which will increase substantially as more cases are brought to tribunal, are funded by the professional bodies. The FRC will also invest in new projects to support its core reporting and governance activities and it faces unavoidable increases in its accommodation costs. The FRC plans to increase its levies on large account preparers by 4.8%, typically equivalent to £1,220 p.a. on average; on smaller companies by 2.2%, equivalent to up to £160 p.a.; and on the professional bodies by 2.2% on top of specific charges for disciplinary and audit monitoring work. Actuarial levies are unchanged.
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.