|
|
26 Apr 2011
THE FINANCIAL REPORTING COUNCIL is to launch an investigation into its efficacy and future.
Roger Marshall, chairman of sub-body the Accounting Standards Board, said the process started in late 2010 when the regulator began considering if it needs a different focus and how to make the group work better.
"I think everyone has started thinking about what lessons can be learnt from the financial crisis and its aftermath," he said.
The FRC is made up of six operating bodies and communication among the groups is one of the primary focuses of the inquiry. The FRC board, which oversees the bodies, is to look into interactions among them and if these can be "maximised".
Marshall revealed that there is also an appetite to strengthen the regulator's powers, claiming that the ability to investigate what goes wrong in the early stages of accounting failures – rather than waiting until after the event – will make the FRC a more subtle and effective operator.
The power to investigate non-accountants such as company directors would also boost the FRC's success when engaging on regulatory issues, Marshall argued.
He was echoed by other stakeholders, who claimed there is a gap in the market when it comes to this kind of investigation. The Financial Services Authority looks only into cases under its remit, while an inquiry by the Department for Business, Innovation and Skills can take years, by which time "the markets have already moved on", said Marshall.
Some observers have suggested that the process of strengthening the FRC could see it go in-house, moving away from its independent quango status and coming under direct government control. Marshall dismissed this proposal, saying that it is the regulator's internal structure up for debate, not its basic configuration.
You may also like
Search thousands of financial jobs:
Search thousands of financial jobs:
Careers
Search for jobs
Click to search our database of all the latest accountancy roles
Create a profile
Click to set up your profile and let the best recruiters find you
Jobs by email
Sign up to receive regular updates with the latest roles suitable for you
Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
Having a real and true view of your organisation’s current financial position, and having the right systems and processes in place, will ensure that you can make strong choices and are ready to capitalise on opportunities
AccountancyAgeInsight is a frequently updated resource centre for finance professionals, offering a free and easy-to-use digital library of briefings, white papers and other information resources. 
Visitor comments Add your comment
FRC is independent?
We already know that the International Federation of Accountants, representing millions of accountants worldwide, has been unable to prevent national governments from intervening harmfully in the audit process. Some administrations insist on light touch regulation, stop effective audit for local political reasons and water down audit conclusions for entities that are capable of collapsing the global economy. Hence the global financial crisis?
But how to stop this surely demands an international debate, not one administered by a national "independent" quango such as the FRC. This is all against the background of the European Commission finally having lost patience and wanting to remove financial regulation from national jurisdictions and replace it with European regulation.
Posted by: slightly optimistic, 26 Apr 2011 | 14:51