It followed both the short-lived and ill-conceived Accountancy Foundation and
a period of intense global regulatory failure. Everybody wanted it to succeed.
However, the past six months – and the Mayflower case in particular – have not
been kind to the FRC.
Moreover, its problems increasingly appear to be of its own making and raise
questions about the judgment of many of those involved. Having failed to uphold
the charges it brought against former FD David Donnelly and auditor
PricewaterhouseCoopers, the FRC and the Accountancy Investigation and Discipline
Board failed to make their reasoning public. In doing so they earned the wrath
of Baroness Noakes who, lest we forget, could be a minister responsible for the
profession in any future Conservative government. Not a wise enemy to make.
It then admitted it had made no provision to cover the costs of the tribunal
and, last week, issued a troubling statement about the Mayflower fallout. ‘The
decision in this case gives rise to potentially significant implications for
future disciplinary cases. The FRC is giving careful consideration to the
implications of the Tribunal’s decision.’
Such a statement could be an attempt to prejudice future tribunals and is
hardly an acceptance of the verdict in the case. It is a statement of the body’s
unwillingness to learn lessons from it, and rather to wallow in self-pity.
Senior figures in the profession are beginning to question those who run the
FRC, and the reluctance of senior figures to respond to events in the manner
befitting a senior regulator, only lends credence to its critics.
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