FRC publishes draft plan & budget for 2015/16
News types: Consultation Announcement
Published: 18 December 2014
Stephen Haddrill, FRC Chief Executive said,
“Over the last year the FRC has taken major new steps to enhance corporate reporting and governance. We have reported on the quality of bank and building society audits, revised the UK Corporate Governance Code, including introducing the new viability statements, issued guidance on the new strategic report and brought together a new forum on actuarial regulation.
As we complete our current three year strategic programme we will promote Clear & Concise reporting and begin the implementation of the EU Audit Directive. We will at all stages continue to work with stakeholders in the UK and beyond.
In July 2015 it will be three years since the FRC’s reforms of 2012. We will take stock of how effective those reforms have been. We will continue to enhance the effectiveness, efficiency and coherence of our monitoring and disciplinary roles. Our aim overall is to avoid large numbers of new initiatives so we can concentrate on ensuring the recent reforms are effectively established and deliver the outcomes sought.”
The FRC proposes to focus on four areas where its work will have significant impact. These are:
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Investor stewardship - Support better quality engagement between boards and shareholders and ensure that signatories to the Stewardship Code deliver on the commitments they have given.
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Corporate reporting - Promote reports that as well as being fair, balanced and understandable are clear and concise.
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Audit - Support the Department for Business Innovation and Skills (BIS) in implementing the amended EU Audit Directive and Regulation, and continue the programme of work to promote audit that is of a consistently high standard and meets investor needs.
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Conduct activities - Enhance their impact and overall effectiveness, including the pace and effectiveness of the FRC’s independent disciplinary arrangements for public interest cases involving accountants and actuaries.
The FRC will, in addition, take forward its work in corporate governance and actuarial standards and regulation. On the latter, the FRC will work with the new Joint Forum on Actuarial Regulation (JFAR) to identify and respond to public interest actuarial risks. Across all its responsibilities the FRC will promote the UK interest in high quality EU and international regulation, including both standard-setting and cooperation to address issues that cut across jurisdictions.
During 2015/16 the FRC will develop its next three year strategy, for 2016/19, and will consult stakeholders on the areas on which it should focus and on its regulatory approach.
Draft Budget
The FRC proposes an overall expenditure of £33.3m in 2015/16 compared to the £31.2m estimated spend in 2014/15. The most significant increase in expenditure, £1.2m, will be in the cost of audit quality reviews, an increase of 12.5%, which results from Competition and Markets Authority (CMA) recommendations.
The FRC will look for an increase of 3.9% in the amount sought through the levy on preparers of accounts for core operating costs and of 2.5% in the contribution from the accountancy professional bodies towards these costs.
The FRC will undertake outreach activities to gather views on its plan and budget including a public meeting in February 2015. The formal consultation will close on 16 February 2015 and comments should be sent 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.