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We comment on the FRC’s draft plan and budget and levy proposals 2014/15

  • FRC Draft Plan and Budget and Levy Proposals 2014 Image

14 Mar 2014

We have published our comment letter on the Financial Reporting Council’s (FRC's) draft plan and budget and levy proposals 2014/15. We support the FRC’s publication of its draft plan and budget and levy proposals and welcome the opportunity to comment.

The draft plan and budget and levy proposals which were issued for consultation in December 2013 identify a number of priority areas for the FRC to focus on in 2014/15. 

We welcome the inclusion of key effectiveness indicators with regard to the FRC’s 2014/15 priorities – a request that we flagged last year – and the plan to conduct thematic reviews on narrative reporting and cutting clutter. 

However we make a number of recommendations including:

  • That the draft plan and budget should explicitly show a direct comparison between what the FRC hoped to achieve and what they actually achieved over the last year.
  • That the draft plan and budget should include some reference to FRC proposed actions/next steps in furthering the ‘prudence debate’ with the International Accounting Standards Board (IASB) and others.
  • That work on an XBRL taxonomy for areas of the annual report other than the financial statements (for instance narrative reporting) should be on a longer-term horizon of the FRC.  We suggest that a project on how to ‘tag’ such information in a way that does not stifle innovation in reporting would be a good project for the Financial Reporting Lab
  • That the FRC should consider setting a target for smaller companies in line with the 80% target on reporting for FTSE 350 companies regarding the latest Corporate Governance Code changes.
  • That in seeking evidence for improvement in the clarity of explanations, the FRC should consider both smaller as well as FTSE 350 companies.

Our full comment letter can be obtained here.

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