Raymond Doherty 29 Oct 2018 11:56am

Stephen Haddrill to resign from the FRC

The chief executive of the Financial Reporting Council (FRC) Stephen Haddrill is preparing to leave the audit watchdog

Haddrill, who has led the FRC since 2009, is expected to depart before the end of the year, according to reports.

The regulator has come under intense scrutiny this year. In April the government launched an independent “root and branch” review of the FRC, led by Sir John Kingman.

The watchdog was criticised for failing to spot trouble at Carillion and its auditors. At a hearing in front of the BEIS and Work and Pensions Committees, MPs said the FRC had been “useless” when it came to Carillion and was “toothless” and “ineffective” as a regulator.

Haddrill argued that its failure to act before it was too late was due to a historical lack of government interest in expanding the FRC’s powers.

The FRC has increased the number and size of the fines it has handed out to firms for misconduct this year.

Haddrill also backed calls for the Competition and Markets Authority (CMA) to look into breaking up the Big Four by spinning off “audit only” firms in a bid to enhance competition. The CMA confirmed it had launched a review this month.

In September last year, the FRC agreed to publish a new register of interests for all board members, committees and councils, following backlash against its decision in the HBOS/KPMG investigation.

It also wants to be involved in the recruitment of potential candidates for senior positions at the largest accountancy firms and has increased possible fines for misconduct to £10m.

Earlier this month the FRC said firms could be banned from providing consultancy services for audit clients as part of its new strategic review aimed at increasing public trust in audit.

The FRC has been contacted for comment.