The FRC will consider the report from the Parliamentary Commission on Banking Standards and the forthcoming PRA report to identify whether there is a case for an investigation under FRC's powers.
The FRC is in touch with the PRA about their work as it develops. The FCA and PRA have access to information from companies’ books and records that the FRC could not obtain under its powers and therefore it is necessary for us to work closely with them to build a full picture. If there is evidence that financial statements were misleading, and there were deficiencies in the audit, the FRC would take this as a basis to launch an investigation into potential misconduct under its powers.
As the FRC told the Treasury Select Committee in 2009, FRC´s enquiries had not shown evidence of an audit failure. The FRC gave further evidence on this to the House of Lords Economic Affairs Committee. That does not mean there is no reason to change the way banks report and their audits are conducted. Since 2010 the FRC has launched the Sharman Inquiry and is consulting on the detailed proposals on going concern, the FRC has changed the Corporate Governance Code to include more requirements on companies for their corporate reporting and included requirements for fuller audit committee reports and the quality of those reports. Other measures include extending the scope of our audit inspection work and providing more transparency in its findings. At heart these changes are designed to help ensure corporate reporting gives early warning of emerging risks.
Press release
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