February 12, 2021
Today the Financial Reporting Council (FRC) has published for consultation its draft 2021/22 Strategy, Plan & Budget which reflects its continued commitment to serve the public interest whilst also moving at pace towards building the enhanced capacity and capability necessary to transform into the new Audit, Reporting and Governance Authority (ARGA).
Over the past year, the FRC has, among other things, strengthened its supervision of audit firms to promote better audit quality, taken the first steps towards operational separation of their audit businesses, set up a competition policy team and created a new stakeholder engagement and corporate affairs function. Moving forward, the FRC will continue to develop a solid foundation on which to expand further. As the UK moves beyond its exit from the EU, the FRC will also support the set-up and staffing of the UK Endorsement Board (UKEB) for IFRS.
The FRC’s CEO, Sir Jon Thompson said:
“Last year we set out a strategy to take the FRC through a period of significant transformation to create ARGA. Our transformation programme has proceeded with vigour, delivering reform which is not dependent on legislation, and developing the policy and resourcing options where legislation is required. By maintaining momentum as we deliver on our strategy, our intention is to create ARGA, fully formed, as soon as the legislation permits.
In this Plan and Budget, we have assumed a further two-year transition period to the creation of ARGA in 2023. We will also be reviewing and implementing a new funding model, ahead of it being put on a statutory footing. We look forward to engaging with stakeholders on the detail of ARGA’s funding proposals in due course.”
In 2021/22 the FRC expects costs to increase by £6.8m, almost half of which funds the organisation’s development and maturity, and half the establishment of the UK Endorsement Board (UKEB) following the UK’s exit from the EU.
The 2021/22 Strategy and Plan & Budget consultation will run until Friday, 12th March. Respondents should submit their comments to FRC.Plan.Budget@frc.org.uk by that date.