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FRC publishes its third Annual Enforcement Review

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03 Aug 2021

The Financial Reporting Council (FRC) has published its third Annual Enforcement Review.

The report reveals that the FRC’s Enforcement Division has grown by 44% in the last year, to enable the swifter resolution of cases, while the number of investigations opened also increased.  Further growth is planned for the year ahead. 

The report highlights the FRC’s continued focus on driving audit quality improvements, with a significant number of cases resolved through constructive engagement. In matters which have been subject to enforcement action, 28 non-financial sanctions have resulted, including a number of requirements and conditions. These have included requirements for audit firms to undertake root cause analysis to ensure the underlying reasons for any failures are swiftly addressed and for training programmes to be implemented in areas of identified weakness.

Last year to assist in driving audit quality the report included themes from past audit cases. This year, with a view to improving the quality of financial statements by demonstrating behaviours to be avoided, the report includes themes from past cases against those responsible for preparing
financial statements.  It also highlight challenges for accountants and auditors in addressing future uncertainties arising from EU Exit, climate change and the pandemic.

The press release and Annual Enforcement Review are available from the FRC website. 

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