BusinessCorporate FinanceFRC faces £1.4m Mayflower crunch

FRC faces £1.4m Mayflower crunch

The Financial Reporting Council, the regulator of the accountancy profession, has made no provision for £1.4m of costs expected to arise as part of the Mayflower tribunal

The chief executive of the body, Paul Boyle, admitted this week that no cost
provision had been made, as the implications of the
Accountancy Investigation
and Discipline Board
’s crushing defeat began to sink in.

The lack of the provision could lead to the body having to go cap in hand to
its paymasters – the government, companies and the firms – as it faced further
criticism this week from a leading member of the profession, and details of a
new legal exchange emerged.

Boyle told Accountancy Age this week: ‘There is no budget for these
costs. If an award is made against us for costs, it will have to be met under
existing funding arrangements. It’s too early to say whether this would involve
any additional payments,’ said Boyle.

The FRC has a projected budget of £14.9m for 2006/2007.

Defendants, in particular
PricewaterhouseCoopers, are
now understood to be on the warpath in their attempts to recover costs, a
decision on which is pending.

Seperately, it has emerged that
Kingston
Smith
, whose partner Emile Woolf was criticised in the AIDB judgment, sent
legal letters to the watchdog over the judgment, which some have speculated may
have been the reason for the controversial delay in its release.

Boyle refused to comment on the issue. The letters are understood to point to
factual inaccuracies.

Kingston Smith’s senior partner Michael Snyder launches a ferocious attack on
industry regulation this week in a piece in Accountancy Age, saying
that tribunals have become ‘lawyer-dominated’ and do not contain enough input
from auditors.

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