27 March 2019

FRC publishes draft Plan and Budget 2019/20

The FRC has welcomed the Government consultation on Sir John Kingman’s Independent Review, which proposes changes to the FRC’s governance and powers as it transitions to a new statutory regulator, the Audit Reporting and Governance Authority (ARGA). 

In 2019/20, the FRC will:

• Support the transition to the new Audit, Reporting and Governance Authority.
• Drive a step change in audit quality in the UK, using its powers to set auditing and ethical standards and monitor and enforce audit quality.
• Promote the quality and usefulness of corporate reporting through our programme of corporate reporting reviews, covering the whole annual report – and using our expanded enforcement resources to pursue an increasing caseload. 
• Promote corporate governance and investor stewardship that contribute to trust in business, including through the proposed new Stewardship Code.
• Working with Government, implement an effective regulatory framework following EU exit.

The FRC has set an initial budget of £38.1m. This is an increase of 11% compared to our expected 2018/19 outturn (£34.4m). The planned increase in 2019/20 will fund an expansion of our audit quality reviews, our audit firm monitoring and supervisory approach and of our enforcement work.
The budget does not include certain costs the FRC cannot yet accurately forecast; the costs of implementing those recommendations of the Independent Review that are subject to the Government consultation, and some of the additional costs related to EU exit.
The FRC therefore expects that in finalising its plan for 2019/20 it will require additional resources, estimated to in the range of £2.4 to £4.9m, beyond the £38.1m budget. This will depend on Government decisions following their consultation and EU exit. The FRC will agree with Government how the additional resources should be secured.  

The consultation will close on 8 May.

Full press release

Consultation on draft Plan and Budget 2019/20

© FRC