The UK’s Financial Reporting Council (FRC) has published its latest 3-Year Plan, outlining its priorities and objectives for the period 2023-2026. It gives a detailed breakdown of intended expenditure for 2023-24 and a summary of the expected trajectory of overall costs and headcount for the following two years. The plan has been developed following a consultation with stakeholders, and the feedback statement shows respondents were broadly supportive of the FRC’s overall approach to its responsibilities and commitment to delivering the principles outlined in the Government White Paper ‘Restoring trust in audit and corporate governance’.
The FRC anticipates an increase of £6.5m ($7.9) in its overall costs for 2023-24, reflecting a delay in the creation of the Audit, Reporting and Governance Authority (ARGA), and has re-prioritised its work to focus on changes that can be made using its existing powers and remit and where appropriate, planning for the creation of new ARGA powers and functions. Despite these challenges, the FRC has already taken numerous steps towards achieving the goals of the reform program. For example, it has released a consultation on a draft Minimum Standard for Audit Committees, as well as publishing guidance on professional judgement for auditors.
The FRC’s Supervision division has also taken responsibility for Public Interest Entity (PIE) auditor registration, which allows the FRC to act decisively when it identifies systemic issues in an audit firm. And the Enforcement division continues to deliver proportionate sanctions in a timely manner, with Constructive Engagement (CE) an increasingly useful approach to many of the cases it investigates.
FRC CEO, Jon Thompson, said: “We are actively working towards the goals of the reform program, and though the legislation required to establish ARGA has been delayed, the FRC remained busy throughout 2022 by concentrating on the changes we can bring about through our current powers and remit.
This plan shows we are committed to fulfilling our mission of serving the public interest and enhancing the quality of corporate governance and reporting.”