The Financial Reporting Council (FRC) expects its 2021/2022 overall 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.
Over the past year, the FRC has “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 stated it will continue to develop a “solid foundation” on which to expand further. As the UK moves beyond its exit from the EU, the council will also support the set-up and staffing of the UK Endorsement Board (UKEB) for IFRS.
Sir Jon Thompson, CEO for the FRC, 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.”
He added that in this Plan and Budget, the council have “assumed a further two-year transition period” to the creation of ARGA in 2023.
Thompson said: “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.”