Raymond Doherty 16 Oct 2019 12:14pm

Kingman concerned over FRC reform “drift”

Sir John Kingman, who led the “root and branch” review of the Financial Reporting Council (FRC), complained that his reforms were not included in the Queen’s Speech on Monday

In a letter to a parliamentary select committee Sir John said he was “concerned about the risk of letting the FRC drift on, half-reformed and lacking the teeth that only legislation can give it”.

He added, “The final, crucial piece of the jigsaw, however, is legislation to put the new regulator onto a proper statutory base – and to give it the powers it needs to do its job.

"It is therefore disappointing that this legislation was not included in Monday’s Queen’s Speech."

The Kingman review, published in December 2018, found the FRC to be a “hangover from a different world” that should be replaced by a new independent body with more powers to make a difference.

The government earlier this year backed these proposals. The review was commissioned after questions were raised about the FRC’s role in the wake of the collapse of BHS and Carillion.

In a letter published earlier this month, business secretary Andrea Leadsom said, “Numerous steps have already been taken that will support a change in culture at the FRC - reinforcing the expectations and organisational structure of a public body in relation to managing public money transparency, governance, confidentiality, lT security and the development of diversity policy and practices in accordance with the public sector equality duty.

“Where legislation is required, as with reform to the audit market, the government remains committed to legislating as soon as parliamentary time allows. That includes on measures to hold company directors to account in relation to their duties in preparing and approving reports and accounts, in addition to auditors and accountants.”