FRC Strategy for businesses, investors and public trust
News types: Codes and Standards Announcements
Published: 19 December 2017
The FRC’s revised UK Corporate Governance Code, alongside a globally respected reporting framework, attracts long-term capital investment to British businesses and supports the public interest through job creation and economic wellbeing. The revised Code will ensure that companies view their obligations to shareholders with due regard to their impact on wider society.
As the UK’s competent authority for audit regulation, the FRC proposes to extend its oversight of the audit profession with new monitoring and supervisory arrangements for the largest audit firms. These will include a focus on the firms’ leadership and governance, values and behaviour, business model and financial soundness, risk management and control, and evidence of audit quality.
The FRC will continue to enhance the speed and effectiveness of its enforcement activities and has committed to increased transparency when closing enforcement cases. The FRC is considering the findings of the sanction reviews conducted by former Court of Appeal Judge, Sir Christopher Clarke, to ensure that sanctions imposed continue to be fair, effective and in the public interest.
The FRC will not increase the amount it raises through its preparers, insurance and pension levies compared with 2017/18.
The 2018/19 budget reflects:
- an increase in its core operating costs of 3% compared to 2017/18;
- no further increase in general reserves in 2018/19, and
- the cost of implementing the new audit firm monitoring and supervision proposals in 2018/19 which will be recovered from the audit professional bodies.
“The FRC has a vital role in maintaining the UK’s global reputation for high standards of corporate governance and reporting. Through a period of uncertainty and change we will tackle those areas where we think improvements are necessary to reflect the strong public interest in transparency and integrity in business. The FRC will continue to engage with, and consult, stakeholders and will not hesitate to challenge where necessary. Good continued control over efficiencies and our level of reserves allows us to budget for no increases in our levies.
Over the coming years, we will reinforce our commitment to driving progress both internally and externally to improve diversity and inclusion. We believe that a diverse workforce contributes to more integrity in business and the long-term success of a company which in turn leads to sustainable growth in the UK economy. As part of our review of the UK Corporate Governance Code we will be consulting on strengthening the diversity principles and provisions”
Notes to editors:
1. The Financial Reporting Council’s (FRC) mission is to promote transparency and integrity in business. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
2. All Press enquiries should be directed to:
- Peter Timberlake, Head of Communications, on telephone: 020 7492 2397/ 07768 502332, or email: [email protected].
- Rita Carolan, Communications Manager, on telephone: 020 7492 2307/ 07428 149096 or email: [email protected].
- Alana Sinnen, Communications Manager, on telephone: 020 7492 2395/ 07949 005526 or email: [email protected].