The FRC

The Financial Reporting Council (FRC) is the UK's independent regulator responsible for promoting confidence in corporate reporting and governance.

Our regulatory philosophy and governance, funding and accountability is set out in our  Regulatory Strategy (Version 3). The major projects and activities that we are planning to undertake in 2008/09 are set out in our Plan & Budget 2008/09.

Our Regulatory Strategy incorporates our Strategic Framework, which we have developed in consultation with our stakeholders.  It consists of four elements: 

• the overall Aim which the FRC promotes – confidence in corporate reporting and governance;
• the six Strategic Outcomes which contribute to our Aim;
• the Supporting Outcomes which contribute to the six Strategic Outcomes; 
• the major Components which contribute to the achievement of the Supporting Outcomes.

The Strategic Outcomes are as follows:

• UK companies with a primary listing in the UK are led in a way which facilitates entrepreneurial success and the management of risk.
• Corporate reports contain information which is relevant, reliable, understandable and comparable, and are useful for decision-making, including stewardship decisions.
• Users of audit reports can place a high degree of reliance on the audit opinion, including whether financial statements show a true and fair view.
• Users of actuarial information can place a high degree of reliance on its relevance, transparency of assumptions, completeness and comprehensibility.
• Clients and employers of professionally qualified accountants and actuaries and of accountancy and actuarial firms can rely on them to act with integrity and competence, having regard to the public interest
• The FRC is an effective, accountable and independent regulator, actively helping to shape UK, and to influence EU and global, approaches to corporate reporting and governance.

The Supporting Outcomes and major Components are stretching but realistic medium-term aspirations. The Strategic Outcomes are, to a significant degree, mutually supporting in that achievement in relation to one of the outcomes can contribute to achievement in relation to one or more others. It is not essential that all of these elements are found in practice in every case. However, we believe that the greater the extent to which they are found, the greater will be the overall level of confidence in corporate reporting and governance.

It is in the nature of our aim and remit that while some of the elements set out in the Strategic Framework are principally the responsibility of the FRC, most depend principally on market participants or other agencies. We see the Framework as a way of facilitating co-operation between our wide range of stakeholders to promote well-founded confidence in corporate reporting and governance in the UK.

The functions we exercise in pursuit of our aim can be summarised as follows:

• promoting high standards of corporate governance
• setting, monitoring and enforcing accounting and auditing standard
• setting actuarial standards 
• statutory oversight and regulation of auditors
• operating an independent investigation and discipline scheme for public interest cases
• overseeing the regulatory activities of the professional accountancy and actuarial bodies

We believe that there are strong connections between the issues of corporate governance, auditing, actuarial practice, corporate reporting and the professionalism of accountants and actuaries. We believe that the breadth of our responsibilities and functions will enhance our effectiveness.

The basis on which the Government reached their decisions about the role of the FRC was set out in two reports, that from the Consultative Group on Audit and Accounting (CGAA) and the Government 'Review of the Regulatory Regime of the Accountancy Profession'.

In May 2006, the FRC and the Actuarial profession agreed a Memorandum of Understanding setting out their respective responsibilities for actuarial regulation.  Arrangements for communications between the actuarial profession and the FRC were agreed in October 2006.