Britain’s accounting watchdog will be dismantled and replaced by a new stronger regulator that can issue harsher penalties and directly intervene in how companies present their accounts in a bid by government to restore trust in the embattled audit market.
Business secretary Greg Clark said he would follow the recommendations put forward in a 2018 review of the Financial Reporting Council's competence by setting up a new, more robust accounting watchdog named the audit, reporting and governance authority.
Mounting concerns
Mr Clark commissioned the FRC review – conducted by former civil servant and Legal & General chairman John Kingman – last year amid mounting concerns the regulator was too slow to investigate misconduct, its sanctions too lenient and its board too close to the industry it supervised.
In total, the government said it would implement 48 of the recommendations made by Mr Kingman. It will start the process to find a new chair and deputy chair of the new regulator “shortly”.
“The creation of a new regulator will ensure that the UK maintains and advances its status as a place of the highest standards in audit,” the government said.
Mr Clark added: “This new body will build on our status as a great place to do business and will form an important part of strengthened public trust in businesses and the regulations that govern them.”
– Copyright The Financial Times Limited 2019
