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FRC outlines three-year plan as costs to rise £6.5m

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The FRC said it has ‘already taken numerous steps’ towards achieving the goals of the reform program.

The Financial Reporting Council (FRC) has published its latest three-year plan, outlining its priorities and objectives for the period 2023-2026.

The FRC revealed it anticipates an increase of £6.5m in its overall costs for 2023-24, reflecting a delay in the creation of the AuditReporting and Governance Authority (ARGA), and has re-prioritised its work to focus on changes that can be made using its existing powers and remit and where appropriate, planning for the creation of new ARGA powers and functions.

Despite these challenges, the FRC said it has “already taken numerous steps” towards achieving the goals of the reform program. For example, it has released a consultation on a draft Minimum Standard for Audit Committees, as well as publishing guidance on professional judgement for auditors.

The FRC’s Supervision division has also taken responsibility for Public Interest Entity (PIE) auditor registration, which allows the FRC to “act decisively” when it identifies systemic issues in an audit firm.

It also confirmed the enforcement division continues to deliver “proportionate sanctions in a timely manner”, with Constructive Engagement (CE) an increasingly useful approach to many of the cases it investigates.

Sir Jon Thompson, CEO of the FRC, said: “We are actively working towards the goals of the reform program, and though the legislation required to establish ARGA has been delayed, the FRC remained busy throughout 2022 by concentrating on the changes we can bring about through our current powers and remit.

“This plan shows we are committed to fulfilling our mission of serving the public interest and enhancing the quality of corporate governance and reporting.”

Writes Lewis Catchpole in Accountancy Today