On the 11th March BEIS announced its plans to replace the Financial Reporting Council (FRC) with a new independent statutory regulator, to be called the Audit, Reporting and Governance Authority. It will be accountable to Parliament, with a new mandate, new leadership and new powers.
Sir John Kingman’s review of the FRC sets out 83 recommendations for improving the effectiveness of the new body. As one of the leading corporate reporting agencies in the UK, Radley Yeldar has always seen the FRC as playing a critical role in the quality of reporting, which we discuss in depth in our recent ‘How does it stack up?’ research.
However, it lacks the teeth and remit to truly guide and regulate reporters.
We are pleased to see the recommendations aim to give the ARGA responsibility for the entire annual report and that it will have a new statutory regime with tests and powers aligned with the Audit Enforcement Procedure. With that said, as ARGA develops, we hope that it will be able to pull the various reporting guidance and Companies Act regulation into one clear nd concise piece of guidance that reporters can follow, and that the new body can regulate against. This has always been a frustration of both companies and the FRC.
We look forward to responding to the consultation in due course and contributing to the success of the new authority.