The UK’s decision to leave the EU has raised questions about whether the FRC's regulatory framework should change in the future
THE FRC has revealed a “step change” in its responsibilities as the profession’s watchdog and suggested the outcome of the referendum on the UK’s membership of the EU has raised questions about the regulator’s future.
In its annual report for 2015/16, the FRC said it will focus on its new role as the competent authority for audit in the UK to improve audit quality and strengthen investor confidence.
Sir Win Bischoff, chairman of the FRC, said accounting watchdog’s aim, after being handed extended powers under the new rules on audit regulation across the EU, is that by the end of 2019 at least 90% of FTSE 350 audits will require no more than limited improvements.
The FRC added that although the UK’s decision to leave the EU has not changed its regulatory framework, it has raised questions about whether it should change in the future.
“We will consequentially pay close attention to the decision now taken by government and parliament, and continue to work in collaboration with our key stakeholders, particularly investors, business and the professionals we regulate, in order to ensure our work continues to support economic growth and the effective functioning of the capital markets,” Bischoff said.
In 2016/17 the FRC said it will undertake the following actions:
Bischoff added: “I have taken a personal interest in our ‘culture coalition’ project. In my experience, embedding a healthy corporate culture, with a focus on respect and good behaviour, is vital to the success of any business and creates an environment on which investors can depend. We have brought together a number of organisations to gather insight into corporate culture and the role of boards, to understand how boards can shape, embed and assess culture, and to identify and promote good practice.”