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Report on Independent Oversight of Regulation of the Audit, Accountancy and Actuarial Professions

The Financial Reporting Council (FRC) yesterday published the Report from the Professional Oversight Board (POB) to the Secretary of State for Business, Innovation and Skills on its oversight of the regulation of the audit, accountancy and actuarial professions, for the year to 31 March 2012. The POB sent its final report to the Secretary of State at the end of June, and this is laid before Parliament yesterday.  On 2 July, as part of the wider restructuring of the FRC, the POB’s responsibilities and activities were transferred to the FRC itself.

The Report comments on the Board’s statutory and non-statutory independent oversight of the regulation of auditors, accountants and actuaries by their respective professional bodies, on its responsibilities for regulation internationally and as the Independent Supervisor of Auditors General. On the regulation of auditors and accountants the Report comments that much regulatory practice is of a high standard, but draws attention to specific areas to which some bodies need to pay particular attention. On the regulation of actuaries, the FRC has encouraged the Institute and Faculty of Actuaries to consider the public interest outcomes it is seeking to achieve in regulating its members, and the quality of the regulatory processes for doing so. The Report notes the publication by the Institute and Faculty of Actuaries of a new regulatory strategy, and updated guidance on whistleblowing and handling conflicts of interest.
 
POB Chair, John Kellas, said:
 

“In recent years, we have reviewed and made recommendations to the recognised professional accountancy bodies on all significant aspects of their regulation of statutory auditors.   This active programme of oversight has helped to maintain and improve the sharpness of the regulatory processes and has led to many specific improvements in the bodies’ systems and practices of audit regulation.
  
We do not think that the current proposals from the European Commission, which would require most day to day regulation of auditors to be carried out independently of the professional accountancy bodies, are necessary, well thought out or would serve the public interest. The current arrangements in the UK allow the FRC to focus on matters of major public interest, while leaving the regulation of other matters to the professional bodies.”

Notes to editors:

  1. The FRC is the UK's independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.  The FRC sets the framework of standards for the accounting, auditing and actuarial profession, oversees their conduct and develops and promotes the UK Corporate Governance and Stewardship Codes.
     
  2. All Press enquiries should be directed to: Oliver Parry, Acting Head of Communications, on telephone: 020 7492 2397 or email: o.parry@frc.org.uk.



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