On June 6, 2018 Sir John Kingman, having been appointed in April 2018 to carry out an independent review of the Financial Reporting Council (FRC), published a Call for Evidence in relation to that review.
The two objectives of Sir John Kingman’s review are (i) to ensure that the FRC’s structures, culture and processes, its oversight, accountability and powers, and its impact, resources and capacity are as good as they could be and are fit for the future, and (ii) to see the FRC standing as a beacon for the best in governance, transparency and independence. As a result, the review team is calling for evidence and information, including specific examples, on the effectiveness of the FRC.
Particular areas in respect of which evidence is requested are as follows:
- The FRC’s purpose and function: the Call for Evidence sets out the FRC’s mission statement and current role which includes the setting of accounting standards, the review of financial statements of public and large private companies for compliance with the Companies Act 2006, the monitoring and maintenance of the UK Corporate Governance Code and the UK Stewardship Code and responsibilities in relation to audit, accountants and actuaries. It asks whether the FRC’s objectives, name and structure remain appropriate.
- The FRC’s impact and effectiveness: the Call for Evidence asks questions about the FRC’s strengths and weaknesses, particularly in light of its roles in audit regulation, accounting and financial reporting and in relation to corporate governance and stewardship codes, and asks about the FRC’s influence and effectiveness in these areas.
- The FRC’s role in corporate failure: the Call for Evidence asks whether the FRC could or should do more to help reduce the risk of major corporate failure, whether it has responded quickly enough to warning signs arising from its work on accounts and financial reporting or on evidence of concerns over poor corporate governance and whether the viability statement could be made more effective.The Call for Evidence also asks questions about the FRC’s powers and sanctions, its legal status and its relationship with Government, as well as questions about governance and leadership, funding, resources and staffing.
Responses are requested by August 6, 2018.
(BEIS, Independent review of the FRC, Call for Evidence, 06.06.18)