Kate O'Neill speaks with Mark Babington & Sarah Rapson on the FRC's transition to a new regulator

Published: 12 July 2022

1 minute read

The Financial Reporting Council (FRC) has today published a Position Paper setting out the next steps to reform the UK’s audit and corporate governance framework.

The paper follows the Government Response to the consultation on strengthening the UK’s Corporate Governance, Corporate Reporting and Audit systems, including the creation of the Audit, Reporting and Governance Authority (ARGA), to replace the FRC.

The document published today builds on the areas of the Government Response that fall within the FRC’s remit, providing advanced clarity for stakeholders on how the work of reform will be delivered ahead of government legislation.

That work includes revising existing codes, strengthening auditing and accounting standards, setting expectations to drive behavioural change ahead of statutory powers, and the development of guidance to address issues set out in the Government Response.

In particular, the Position Paper sets out proposed changes to the UK Corporate Governance Code. This will provide a stronger framework for reporting on the effectiveness of internal controls and Board responsibilities for expanded sustainability and ESG reporting, and new guidance on enhanced resilience statements and fraud reporting by directors.