THE FRC has come under fire over its motives for carrying out disciplinary procedures and the time it takes to carry them out, at its annual general meeting yesterday.
At its AGM the board outlined proposed reforms which it believes will allow the council to turn around disciplinary cases faster.
However, questions arose regarding the motives behind current investigations, with the FRC currently pursuing cases where they are likely to make a successful prosecution.
An audience member said the FRC’s judgement in the pursuance of cases was “misplaced” and it needed to think more about public confidence and not just prosecution.
He added that motives should be changed to look at cases for “public confidence, not from a prosecution point of view”, such as in the instance of Northern Rock, Lehman Brothers, HBoS and RBS.
Stephen Haddrill, FRC CEO, said in cases such as HBoS and RBS the responsibility in determining what happened has to lie with the FSA as they have full access which the FRC doesn’t necessarily have.
However Accounting Practices Board chairman Richard Fleck said he hoped the reform will bring the FRC powers together allowing it to inspect, monitor and discipline more effectively.
The proposed reforms will see the seven different operating arms reduced down to just two divisions which will consists of a guidelines and auditing standards arm and a disciplinary one.
The FRC claims the reform will allow the council to investigate and sanction the accountancy profession quicker and increase its independence, because it will no longer be required to obtain agreement from the professional bodies.
FRC chairman Baroness Hogg (pictured) said she didn’t think there was enough “joined up discussion in the financial regulatory system” as at the moment the FRC was behind the Financial Services Authority in the regulatory hierarchy.
However, she said there is “ongoing regular dialogue between regulators and what I hope that will do is move away from this long food chain that we have”.
Chairman Baroness Hogg, CEO Stephen Hadrill, chairman of the Accounting Standards Board Roger Marshall, and chairman of the Accounting Practices Board Richard Fleck led the AGM.
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