FRC receives green light to reform its structure
House of Lords and House of Commons approve reform of FRC which will see its seven departments reduced to two
THE FINANCIAL REPORTING COUNCIL has been given the go-ahead to change its structure which includes the reduction of its departments from seven to two.
Yesterday, the reforms received approval from the House of Commons and the House of Lords.
According to the FRC, the changed structure will enable it to operate as a unified regulatory body, with enhanced independence from those it regulates and a more proportionate range of sanctions.
From 2 July, decisions on standards and how the regulator will organise responsibilities will be handed over to its board.
The FRC currently has several operating bodies, including the Accountancy Actuarial Disciplinary Board (AADB), Audit Inspection Unit (AIU), Financial Reporting Review Panel (FRRP), Professional Oversight Board (POB), Auditing Practices Board (APB), Accounting Standards Board (ASB) and the Board for Actuarial Standards (BAS).
There will now effectively be two bodies within the Council.
Codes and Standards will succeed the ASB, APB and BAS. It will be supported by three councils that will advise on accounting, audit & assurance and actuarial matters, with these councils chaired by former PwC senior partner Roger Marshall; ex-Ernst & Young chairman Nick Land; and member of the pension regulator and FSA employee Olivia Dickson.
Jim Sutcliffe, currently chairman of BAS, will become chairman of the Codes and Standards division.
The Conduct Division of the FRC will cover supervisory and disciplinary matters and takes over from the FRRP, POB, AIU and the AADB. It will be chaired by Richard Fleck, the current chairman of the Auditing Practices Board.
Chairwoman of the FRC Baroness Hogg (pictured) said: “We are pleased that we can now proceed on the basis of our reformed powers. The reforms will further enable the FRC to use its wide-ranging expertise to strengthen the UK voice on international debates on corporate governance and reporting.
“As we’ve made clear throughout the consultation process, these reforms have represented the close and productive dialog with a wide range of stakeholders to support our core mission of promoting high-quality corporate governance and repoting in the UK to help foster investment.”
