FRC announces budget cut for coming year

THE REPORTING WATCHDOG FRC is to push for better quality reporting and greater clarity about the work of auditors despite a cut in its overall budget for the coming year.

In setting out its priorities and funding for 2012/13, the Financial Reporting Council announced that its overall budget of £22.4m and the budget for core operating costs of £14.6m are 2% lower than the previous year.

The regulator will push ahead with the introduction of a revised corporate governance code with effect from 1 October, while consulting on revisions to stewardship code and taking forwards proposals on the better quality of business models and risk; greater clarity about the responsibilities of audit committees and auditors; and better reporting of the work of the audit committee, including of their oversight and appointment of the auditor.

The FRC also pledged to make sure that its approach to corporate governance and reporting is properly understood and to exert more influence in the EU and internationally.

In addition, the FRC said it will take forwards Lord Sharman’s conclusions on how the health of a company, especially whether it is a going concern, should be assessed and reported.

The first findings from the work of its Financial Reporting Lab on company reporting practices can also be expected later this year.

“We place particular emphasis on the need to influence EU and international developments. We remain fully committed to the principles of good regulation and to keeping the costs associated with the FRC, both in terms of our own costs and the regulatory regime we operate, under careful control,” said FRC chairman Baroness Hogg.

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