PracticeAuditLords expose oversight to Freedom of Information Act

Lords expose oversight to Freedom of Information Act

In opening up the professional oversight board to the freedom of information act, the Lords picked a sensitive subject on which to take on the Financial Reporting Council

In May of last year, Paul Boyle spoke openly about the watchdog’s concerns
about coming under the FOIA: ‘When information is disclosed to us in confidence,
then that would have to be exempt,’ said Boyle. ‘If that was not the case we
couldn’t do the job.’

Resistance to transparency has for some time been one of the FRC’s guiding
principles. If we said too much publicly, people would not say things to us
privately, it says.

Boyle said last year that the FRC expected to come under the act before long.
Now, for POB at least, it has happened, as a result of a last-minute amendment
to the Companies Act.

Will it mean companies can get reports on their auditors? That may be more
unlikely: requesters can only request information that the body holds (if POB
does not produce individual reports, it does not have to compile them to meet
the request); and the FRC may well fairly claim that it would affect the freedom
of its officers to do their jobs if it disclosed it anyway.

The Professional Oversight Board made clear its displeasure last week
surprisingly openly.

Director of the POB Paul George said the body was ‘disappointed’ at the
last-minute amendment.

‘It’s not a total shock but one did hope that common sense would prevail.

‘We’re not convinced that the bill is the right mechanism to determine
whether a body should be subject to the FOI.

‘We are currently holding a consultation on the subject of audit inspection
activities, and we thought that would be the right forum to address the matter,’
said George.

Whether or not the POB will disclose information, one thing it could find is
that Baroness Noakes, who pushed the amendment, might not be the best person to
pick a fight with.

She said during debates that it was ‘extraordinary’ that audit committees
were being denied access to reports which would improve their decision-making
and urged the Public Oversight Board to move voluntarily ‘in the direction of
transparency’.

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