UK Accounting watchdog to bite harder with 10 million pound fines
The independent review of sanctions was undertaken by a panel chaired by former Court of Appeal Judge Sir Christopher Clarke. Its report of October 2017 made several key recommendations including:
- An increase in fines to £10 million or more for seriously poor audit work by a Big 4 firm.
- Exclusion from the accounting profession for a minimum of 10 years for dishonesty;
- Greater use of non-financial penalties;
- Sanctions that reflect the level of cooperatio
by respondents. The FRC’s updated sanctions guidance will take effect on 1 June 2018.
The Financial Reporting Council’s (FRC) mission is to promote transparency and integrity in business.
The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries.
As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
The FRC operates three key enforcement procedures; the Accountancy Scheme, the Actuarial Scheme and, in support of its UK competent authority responsibilities, the Audit Enforcement Procedure.
The FRC’s Conduct Committee has issued Sanctions Guidance in support of the Accountancy Scheme and the Actuarial Scheme and a Sanctions Policy in support of the Audit Enforcement Procedure.
The guidance in these documents is advisory but where a decision-maker, such as a Tribunal, Enforcement Committee, or the FRC Executive Counsel, decides to depart from the guidance, it should explain its reasons for the departure.
The independent review of sanctions was undertaken by a panel chaired by former Court of Appeal Judge Sir Christopher Clarke. ■