PracticeAuditFRC signals possible halt to further enquiries

FRC signals possible halt to further enquiries

Accounting regulator may think twice about future enquiries for fear of costly litigation orders against it

The Financial Reporting Council’s chief executive said the independent
tribunal, which made a costs order against the regulator, has misunderstood its
disciplinary body, the Accountancy Investigation and Discipline Board.

Paul Boyle, FRC chief executive, told the FT: ‘We are less likely to
bring complaints if the rules of the scheme remain as they are, but these rules
could be changed.’

This follows the defeat last month of the
AIDB, which brought complaints against
collapsed bus manufacturer Mayflower, and
its auditors PricewaterhouseCoopers
during its first public tribunal.

Last month the tribunal dismissed the complaints against Mayflower’s FD David
Donnelly and PwC and has now ordered the FRC to pay £400,000 towards PwC’s costs
and £587,500 towards those of Mr Donnelly.

The decision is embarrassing for the AIDB, which the government hoped would
show that self regulation of the profession would enhance confidence in audited
accounts. All the six main accountancy bodies subscribe to the board. If it is
seen to step back from investigations because it fears large compensation claims
ministers may be forced to reconsider its status, The Guardian
reported.

Further reading:

FRC to pay almost £1m in costs over
Mayflower case

FRC faces £1.4m Mayflower crunch

AIDB criticised after defeat at public tribunal

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