The FRC have indicated that 2019/20 will be a year of transition for the FRC. In response to the recommendations of Sir John Kingman’s Independent Review, the Department for Business, Energy and Industrial Strategy (BEIS) is consulting on proposals to replace the FRC in its current form with a new statutory regulator to be called the Audit, Reporting and Governance Authority (ARGA). The FRC indicates that it recognises the need for change and “believe the speedy implementation of the recommendations of the Independent Review can help increase public confidence in audit, reporting and governance in the UK”.

During 2019/20 the FRC’s strategic priorities include:

• Supporting the transition to the new Audit, Reporting and Governance Authority (“ARGA”).
• Driving a step change in audit quality through the use of its powers to set audit standards and its monitoring and supervision of auditors.
• Promoting the quality and usefulness of corporate reporting through increasing the number of corporate reporting reviews undertaken and focusing on those areas that it believes boards and preparers needs to address. These reviews will also cover the whole of a company’s annual report.
• Promoting corporate governance and investor stewardship that contribute to trust in business. The FRC will extend its monitoring of practice and reporting on corporate governance and assess how effectively companies are implementing the new UK Corporate Governance Code.
• Working with Government to implement an effective regulatory framework following EU exit.

The FRC also sets out its proposed budget for 2019/20 for expenditure and funding. Overall, the funding requirement is expected to increase by 14% and this increase is expected to fund an expansion in audit quality reviews, audit firm monitoring and supervisory approach and enforcement work.

The press release and Plan and Budget 2019/20 are available on the FRC website.