Financial Reporting Council
The Financial Reporting Council (FRC) is the UK's and the Republic of Ireland's independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
Structure
The FRC is a company limited by guarantee, partly funded by government and the industry and its board of directors is appointed by the Secretary of State for Business, Innovation and Skills. It and its subsidiaries play crucial roles in the oversight and development of corporate governance standards in the UK and the Republic of Ireland, such as the UK Corporate Governance Code and standards for the accounting industry.
The FRC board is supported by three committees:
- the Codes & Standards Committee
- the Executive Committee
- the Conduct Committee
The Codes and Standards Committee advise the FRC board on matters relating to codes, standard-setting and policy questions, through its Accounting, Actuarial and Audit & Assurance Councils (formerly Audit Practices Board). The Conduct Committee advise the FRC Board in matters relating to conduct activities to promote high-quality corporate reporting, including monitoring, oversight, investigative and disciplinary functions, through its Monitoring Committee and Case Management Committee. The Executive Committee will support the Board by advising on strategic issues and providing day-to-day oversight of the work of the FRC.[1]
Former structure
The FRC incorporates six operating bodies:
Accounting Standards Board
The role of the Accounting Standards Board (ASB) is to issue accounting standards in the United Kingdom. It is recognised for that purpose under the Companies Act 1985. It took over the task of setting accounting standards from the Accounting Standards Committee (ASC) in 1990. However, ASB was overtaken by Financial Reporting Council (FRC) on 2 July 2012. Thus, FRC is now the authority that may issue accounting standards in UK.
Financial Reporting Review Panel
The Financial Reporting Review Panel (FRRP) was established in 1990 as a subsidiary of the United Kingdom's Financial Reporting Council. The FRRP seeks to ensure that the provision of financial information by public and large private companies complies with relevant accounting requirements such as the Companies Act 1985.
Accountancy & Actuarial Discipline Board
The Accountancy & Actuarial Discipline Board (AADB) is the independent, investigative and disciplinary body for accountants and actuaries in the United Kingdom. The AADB was formerly known as the Accountancy Investigation & Discipline Board (AIDB). It changed its name to the AADB on August 16, 2007. The AADB Scheme establishes the framework and sets in place the legal formalities of participation between the AADB and the Participating Accountancy Bodies i.e. the Institute of Chartered Accountants in England and Wales (ICAEW), the Association of Chartered Certified Accountants (ACCA), the Chartered Institute of Management Accountants (CIMA) and the Chartered Institute of Public Finance and Accountancy (CIPFA), The Institute of Chartered Accountants of Ireland, and the Institute of Chartered Accountants of Scotland.
As of 2010 the AADB has a substantial workload including investigations into the conduct of professional firms, such as EY, that had advised Lehman Brothers, JPMorgan, Connaught, Aero Inventory and BAE.[2]
Professional Oversight Board
The Professional Oversight Board (POB) is a UK regulatory body specializing in the accounting, auditing and actuarial professions. It is a part of the Financial Reporting Council (FRC), the independent regulator of corporate governance and reporting in the UK.
The Board's stated purpose is to support the FRC's goal of investor and public confidence in the financial governance of business organizations. The Board provides assurance that professional accountancy bodies are properly setting standards and enforcing discipline for their members, in accordance with the Companies Act 2006 and other statutory requirements. The POB can carry out inspections on behalf of the FRC, but if any shortcomings are found, sanctions can only be imposed by the professional bodies.[3] However, if a complaint raises concerns that a professional accountancy or actuarial body may have breached significantly its own standard procedures in the handling of a complaint about their member, the POB will normally seek the comments of the relevant body and look at papers relating to the case as appropriate. The Board will then normally write to the complainant to tell them the outcome of their consideration of the matter and whether the body proposes to take any action based on their comments. The POB does not have the power either to overturn any decision which the body has made in a case or to direct how the body should handle a case.[4]
The Board also operates an Audit Inspection Unit (AIU) that oversees auditing organizations and makes recommendations for appropriate regulatory actions by governmental and professional authorities. As part of its oversight of the actuarial profession, the Board monitors the activities of actuarial organizations with regard to the education, discipline, ethical standards and continuing professional development of their members. The Board also seeks to provide a framework for the evaluation of the quality and effectiveness of actuarial work.
Before 5 May 2006, the Board was known as the Professional Oversight Board for Accountancy. The name change reflected the Board's additional responsibility for oversight of the actuarial profession from that date.
In 2011, the Board published information for the first time about shortcomings in self-regulation by particular institutes. Press reports highlighted comments about ACCA, which had implemented recommendations to improve its examination syllabus, but needed to pay greater attention to continuing monitoring of members who had registered as auditors some years ago.[5]
The Board contains members from a wide range of backgrounds. As of 2011 Paul George is its Director,[3] and John Kellas is interim chair following the death of Dame Barbara Mills.[5]
Auditing Practices Board
The Auditing Practices Board Limited (APB) was originally established in 1991 as a committee of the Consultative Committee of Accountancy Bodies, to take responsibility within both Ireland and the United Kingdom for setting standards of auditing with the objective of enhancing public confidence in the audit process and the quality and relevance of audit services in the public interest. In 2002 APB was re-established under the auspices of The Accountancy Foundation and, following a UK government review, it has been transferred to the Financial Reporting Council (FRC). Its objective has remained the same, but its remit has been extended to include responsibility for setting standards for auditors' integrity, objectivity and independence.
Senior personnel
Sir Winfried Bischoff has been Chairman of the FRC since May 2014. Other board members include Gay Huey Evans, Melanie McLaren and Paul George.[6]
The FRC's Chief Executive since November 2009 is Stephen Haddrill.
Financial Reporting Review Panel
The Financial Reporting Review Panel (FRRP) was established in 1990 as a subsidiary of the United Kingdom's Financial Reporting Council. The FRRP seeks to ensure that the provision of financial information by public and large private companies complies with relevant accounting requirements such as the Companies Act 1985.
Controversy
On the 19th of April 2013, the Daily Mail ran a story titled "Criticism as seven watchdog members set to investigate KPMG are revealed as current and former employees".[7]
See also
References
- ↑ "FRC structure". Financial Reporting Council.
- ↑ Disciplinary funding costs leap at the ICAEW, Accountancy Age, 10 May 2011
- 1 2 Licensed to audit?, Accountancy Age, 13 May 2011
- ↑ Complaints about Registered Auditors, Accountants and Actuaries
- 1 2 Orlik, Rose (22 July 2011). "POB regulation report names and shames institutes". Accountancy Age. Retrieved 28 July 2011.
- ↑ FRC Board, Financial Reporting Council. Retrieved 19 January 2015.
- ↑