The Department for Business, Energy and Industrial Strategy (BEIS) has published an independent call for evidence on the role and effectiveness of the Financial Reporting Council (FRC).
The FRC is the UK’s central authority for accounting and audit regulation. It is also responsible for publishing codes of good practice for corporate governance and investor engagement (stewardship).
The call for evidence focusses principally on the FRC’s structure, culture, accountability and powers, and how it is governed and resourced. In addition, the paper raises the following questions:
- What should the FRC’s objectives be? Does the FRC need structural change? Should any of its functions be moved to other regulators?
- How effectively does the FRC improve audit? Is it “too close to the big 4” accounting firms? How effectively has it influenced UK and international accounting standards and how else can it improve the quality of financial reporting?
- Has the FRC’s Stewardship Code improved engagement by institutional investors?
- How could the FRC better take swift, effective and appropriate enforcement action? Are there any gaps in its powers? Could the FRC do more to help reduce the risk of major corporate failure?
- How could the longer-term viability statement be made more effective?
- Should the FRC be put on a more conventional statutory footing?
- Who should fund the FRC, and how?
The review has asked for responses by 6 August 2018.