THE HEAD of the UK’s financial reporting watchdog has said he has “absolute” confidence in the disciplinary wing of the regulator as it juggles a huge workload with a significantly increased budget.
The statement came from Stephen Haddrill, chief executive of the Financial Reporting Council (FRC), during its annual open meeting yesterday. He was challenged on the subject during questions for a panel of FRC officials when the current workload of the Accountancy and Actuarial Discipline Board was highlighted.
The AADB’s caseload involves 15 cases including public interest investigations relating to the audit of Lehman Brothers, BAE Systems, JP Morgan and iSoft.
The FRC revealed in December that the draft budget for disciplinary work has been increased by £1.5m to £4.4m, a significant hike on the previous year. The FRC is planning to reduce its core operating costs by £700,000.
Questions were also asked of the FRC’s drive to make company reports accessible. Private investor John Owens pleaded with the FRC to keep reports paper based. He said he was “appalled” at the prospect of companies being told they are no longer required to produce “printed” annual reports.
The FRC was also told that the use of so called “restrictive covenants” by banks forcing clients to use Big Four only auditors was “profoundly in restraint of trade”. The remark came from Simon Osborne, joint head of the Institute of Chartered Secretaries and Administrators.
FRC chairman Baroness Hogg replied by saying that the regulator didn’t know the extent to which such covenants were used and that research was needed.
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