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FRC imposed ‘record’ £40.5m in sanctions in FY22

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The FRC has revealed that a record number of cases were resolved in the year 2022/23 that resulted in financial sanctions of £40.5m being imposed, according to the council’s Annual Enforcement Review that was published today (27 July).

Quality improvements in enforcement investigations also resulted in discounts in headline financial sanctions ranging from 25-43%

The year saw the FRC’s highest ever sanction of £20m that was imposed by the Independent Tribunal in a case which “underscores the seriousness of providing deliberately misleading information” to the FRC’s inspections team.

According to the council, its ongoing commitment to “timely” enforcement actions is also reflected in year-on-year improvements in the published KPI over the last five years, with 75% of cases meeting the KPI in 2022/23.

In addition, it also reflected the maturity of changes implemented over the period, including growth in the Enforcement Division’s headcount and methods of honing case focus such as the introduction of in Division specialist senior audit expertise.

Quality improvements in enforcement investigations also resulted in discounts in headline financial sanctions ranging from 25-43%.

Elizabeth Barrett, executive director of enforcement at the FRC, said: “The record number of cases concluded this year reflects the strengthened capability and determination of the FRC to hold firms and individuals to account for serious accounting and audit failures.

“Timeliness has been a key priority over the last five years and significant ongoing improvements in this area are recorded in this year’s review.”

She added: “While higher financial sanctions are an important marker of the seriousness of the failings, non-financial sanctions continue to play a key role in driving improved behaviour and outcomes to deliver long-term positive change.”

Corina Duma writes  in Accountancy Today