On 18 October 2011, the Department for Business, Innovation and Skills and the Financial Reporting Council (‘FRC’) launched a joint consultation paper on reform of the FRC. A number of the proposals are aimed at focusing the work of the FRC on aspects of the most concern to the running of the capital markets and include the following:
- whether the monitoring and enforcement functions of the FRC should be limited mainly to publicly-traded companies and the largest private companies. (The FRC would, however, still set standards for governance, accounting, audit and actuarial work applicable to the corporate sector generally); and
- whether the FRC’s accountancy disciplinary function should be restricted to the work and conduct of accountants in the preparation and audit of reports for the capital markets. The appropriate professional body would deal with other areas of potential misconduct.
The consultation also contains proposals for restructuring the FRC, as well as proposed measures for enhancing its independence.
Responses to the consultation are invited by 10 January 2012. Any changes are likely to be implemented in April 2012.
Consultation Paper: Proposals to Reform the Financial Reporting Council: http://www.frc.org.uk/images/uploaded/documents/FRC%20reforms%20condoc.pdf