I have over the last few years been one of a small group who have supported Tim Bush at the Local Authority Pension Fund Forum (who I advise on tax issues) with regard to his campaign for reform of the UK Financial Reporting Council.
Our criticisms have been multifold, ranging from corporate capture from the accountancy profession and business who they were meant to regulate, to failing to act in the public interest, to straightforward incompetence, to failing to address issues of public concern, like country-by-country reporting, on which they could have taken a stand. There have also been considerable criticisms of their governance structures. It was therefore welcome to note this report in the FT this morning:
The UK’s accounting watchdog is facing a formal inquiry into its independence and competence after being criticised by Greg Clark, the business secretary.
Mr Clark said in evidence to a committee of MPs that the Financial Reporting Council should be examined, after concerns about its “toothless” regulation of the industry.
“There is a strong case for reviewing the operation of the FRC and that is something that I intend to require,” said Mr Clark. “We should look at the operations of the FRC to see whether there are changes that are required – this should be done independently.”
Bring it on, as I think some say. It's long overdue. And the language is so clear that the chance it will survive looks to be very limited.
That's the good news.
The bad news is that they will probably appoint PWC to do it.