Professional services

Contact: Robert Morris, Graham Reid
and Davina Given

Professional services

What might the Audit Reform and Corporate Governance Bill mean for management liability?

The Audit Reform and Corporate Governance Bill is ready to become the overhauling legislation of the regulation of audit and corporate reporting. With it will come a transformation of how company directors are scrutinised and held accountable. The draft legislation involves replacing the FRC with a new regulator: ARGA.

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New Chief Operating Officer joins FRC

The Financial Reporting Council (FRC) has appointed Vinita Hill as its new Chief Operating Officer, effective from 25 September 2024. Vinita brings extensive public sector experience, having led internal operations in areas such as Finance, Risk, Procurement, Human Resources, Information Systems, and Facilities.

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Professional services

FRC revises technical actuarial standards for insurance

The Financial Reporting Council (FRC) has released version 2.0 of Technical Actuarial Standard 200 (TAS 200) on 20 September 2024. The revisions incorporate stakeholder feedback and aim to address developments in the insurance industry. Key updates include guidance for actuarial work related to the FCA’s Consumer Duty principle and addressing gaps in areas such as insurance transformations, audit and assumption setting. Simplifications were also made by removing provisions now covered in TAS 100.

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FRC issues latest Annual Review of Corporate Reporting

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting, highlighting the findings from its monitoring of UK companies’ annual reports and accounts. The FRC noted that the quality of reporting in the FTSE 350 has been maintained, with improvements in several areas. However, there was an increase in restatements related to asset impairments and cash flow statements, particularly outside the FTSE 350. The FRC emphasised the importance of companies and auditors reviewing its findings to avoid future breaches. The review also noted relatively few compliance issues in sustainability reporting against the TCFD framework for premium-listed companies.

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IASB outlines proposed equity method updates

The International Accounting Standards Board (IASB) has issued an Exposure Draft (ED) proposing changes to the equity method for accounting investments in associates and joint ventures. The ED aims to reduce diversity in practice and address application questions, such as impairment indicators, recognition of losses, and transactions with associates. It includes new requirements for contingent consideration, changes in ownership interest, and additional disclosure requirements. The IASB chose not to undertake a fundamental review of the equity method, focusing instead on clarifying existing standards. Feedback on the proposals can be submitted until 20 January 2025.

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FRC updates UK and Ireland accounting standards

The Financial Reporting Council (FRC) has released updated September 2024 editions of UK and Ireland financial reporting standards. These new editions incorporate all amendments issued to date, including those from the "Periodic Review 2024". The update covers various Financial Reporting Standards (FRS) and related documents, reflecting recent developments in accounting standards, legislation, and regulation. Key changes include amendments related to reduced disclosure frameworks, international tax reform, and Irish company size thresholds. The FRC has provided supporting materials such as podcasts and webinars to help stakeholders understand the changes. While some amendments are immediately applicable, others will become mandatory in future reporting periods. The FRC plans to continue engaging with stakeholders and will publish updated staff factsheets to support the implementation of these amendments.

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Professional services

FRC publishes key accountancy and audit facts and trends report for 2024

The Financial Reporting Council (FRC) has released the Key Facts and Trends (KFAT) report. In this year's report, 33 of 41 Public Interest Entity (PIE) clients of varying sizes took part. The report has shown growth within the accountancy profession and a global increase in membership.

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BSB response to consultation on regulating barristers in chambers

Following a consultation on regulatory expectations of chambers launched last year, the BSB has published its response. As a result of engagement with barristers, clerks, practice managers and other stakeholders, the BSB announced it will have a dedicated section on its website to highlight regulatory requirements of barristers' practice management in chambers. The BSB is also committed to give flexibility to chambers due to their varying size and governance and as such it will frame regulatory rules on practice management in terms of outcome, so that chambers can adapt them more flexibly.

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SRA published revised business plan for 2024/25

On 2 October 2024, the Solicitors Regulation Authority (SRA) published their Business Plan for the year 2024/25, which highlights the areas where the regulatory will focus its work on for the upcoming year. The SRA updated their plan following a consultation with stakeholder on a draft version and as such it will now include more information in relation to choosing and using legal services. Areas of work highlighted in the plan include themes and issues from the Consumer Protection Review; bulk claims litigation issues and potential future activity; and an improved approach to risk management, which will include data harnessing.

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BSB’s 2023-2024 regulatory decision-making report published

The Bar Standards Board (BSB) has published its 2023-2024 Regulatory Decision-Making Annual Report, covering April 2023 to March 2024. This fifth report since the 2019 reform highlights increased productivity, timeliness, and responsiveness. An end-to-end review by Fieldfisher LLP led to recommendations now being implemented to enhance performance. Key statistics include 2,701 reports received, a decrease in social media-related reports, and fewer sexual harassment cases. Cases referred for investigation dropped by 11%, while applications increased by 25%. The report also notes 614 new pupillages. The BSB is introducing new KPIs from April 2024 to better reflect operational performance. The Independent Decision-Making Body also released its annual report.

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Professional services

Publication of The Insolvency Service Enforcement Framework

On 4 October 2024, The Insolvency Service published the framework for their enforcement activity and powers. The framework highlights the role of The Insolvency Service in tackling insolvency-related misconduct through its investigation and enforcing activities and tools. The organisation uses a risk based approach when determining the priority of cases to be investigated including considerations of harm caused and impact on others. The Insolvency Service also works in collaboration with other government agencies and department by sharing intelligence and information.

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FRC key facts and trends reports

On 30 September 2024, the Financial Reporting Council (FRC) published its annual report into key facts and trends of the accountancy and audit sector. Key highlights on the accountancy profession from the report include an increase in membership on a UK and global level while student levels are starting to appear steady after experiencing a decline in the past few years. In regards to the audit landscape, the report found a steady trend of consolidation, with the overall number of registered audit firms decreasing. However, the number of non-Big Four firms undertaking FTSE 350 audits was up to 41 in 2023 from 35 in 2022.

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