DTI report: FRC replaces the Foundation
Patricia Hewitt's review of the accountancy profession today creates a independent super watchdog with powers to regulate the profession, judge auditor objectivity, and punish inappropriate practice.
Link: Read the full report on Hewitt’s speech
The Financial Reporting Council will take over the function of the Accountancy Foundation, founded no more than two years ago. The restructuring will also result in ‘consequential changes’ to the responsibilities of the boards of the Foundation’.
‘We recognise that this would represent a further change early in the life of the Foundation. However, we think that our proposals would promote public confidence in the regulation of accountancy in the UK and would maintain the UK system’s leading international reputation in the light of wider reforms,’ Hewitt wrote in her report.
The ‘new’ FRC takes on the functions of the Accountancy Foundation to create a unified and authoritative structure. It will have three responsibilities: setting of accounting and audit standards, enforcement and oversight of major accountancy bodies.
In its structure, the FRC council oversees five bodies: The Auditing Practices Board, the Accounting Standards Board, the Financial Reporting and Review Panel, the Investigation and Descipline Board and the Professional Oversight Board.
The super watchdog should be paid for by government, the profession and companies, Hewitt told parliament today. ‘The FRC will need more investments. The government will pay its share,’ she said.