FRC issues Plan and Budget for 2017/2018

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30 Mar, 2017

The Financial Reporting Council (FRC) has published its Plan and Budget, including its Levies, for 2017/18 which indicates those priorities that it will focus on in 2017/18.

The work plan includes a set of indicators, alongside each priority, that will assist the FRC in assessing the state of key aspects of corporate governance and reporting in the UK.

In 2017/18 the FRC’s priorities are: 

  • Promoting high quality corporate governance and effective investor stewardship. Key activities include:
    • Undertake a “fundamental” review of the UK Corporate Governance Code and its associated guidance.
    • Following its Corporate Culture report by monitoring and reporting on culture by companies and investors.
    • Scrutinising and reporting on the quality of reporting against the Stewardship Code and delisting signatories that fall within tier 3 unless they have taken action to improve their reporting.
  • Enhancing the speed and effectiveness of its enforcement role
    • The FRC will seek to expand its team and update its procedures to ensure that reviews can be completed as quickly as possible with sufficient resources. 
  • Promoting clear and concise corporate reporting. Key activities include:
    • Continuing to work to influence the development of International Financial Reporting Standards (IFRSs).
    • Producing a second annual assessment of the quality of corporate reporting in the UK, following its first report in October 2016.
    • Focusing corporate reporting reviews for the following priority sectors:
      • Property Travel and leisure.
      • Support services.
    • Conducting thematic studies of:
      • Disclosure of judgements and estimates.
      • Pension Disclosures.
      • Alternative performance measures.
    • Monitor disclosure relating to:
      • New accounting standard disclosures
      • Principal Risks and Uncertainties – specifically the effect of the decision to leave the EU and the low interest rate environment on risk disclosures.
    • Focus the work of the Financial Reporting Lab on:
      • Improving the reporting of Principal risks and viability statements.
      • The Digital Future: Data project.
      • Further initiatives on Clear & Concise reporting.
    • Updating its Guidance on the Strategic Report.
    • Conduct a triennial review of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and continue to monitor its impact.
  • Promoting justifiable confidence in auditing. Key activities include
    • Fulfilling its responsibilities as the Competent Authority for audit in the UK
    • Publishing a second report on developments in Audit, following its first report in July 2016
    • Areas of focus include changes in auditor appointment, audit of pension balances and disclosures and impact of currency fluctuations.
    • Conducting thematic reviews of:
      • Auditor’s responsibilities for areas of the annual report beyond the financial statements;
      • Audit firm culture and governance; and
      • Materiality
    • Influencing the work of the International Auditing and Assurance Standards Board (IAASB) and other standard-setting bodies
  • Promoting high quality actuarial work
  • Ensuring that it is effective and efficient, and has a corporate culture that supports its mission and regulatory role.

The FRC also sets out its proposed budget for 2017/18 for expenditure and funding.  Overall the funding requirement is expected to increase by 4% from £34.6m to £36.0m.  

The full details of the plan and budget and press release can be obtained from the FRC website.  Our previous story on the draft plan and budget sets out further information on the background behind these areas of focus.

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