FRC releases revised 3-year plan following delayed ARGA transition
The FRC has announced a revised 2023-26 Draft 3-Year Plan which sets out its revised priorities for the next three years and how it will achieve them.
This is the second three-year plan published by the FRC in 2022, following the previous 2022-25 3-Year Plan released on 5 April 2022. Whilst the revised plan re-affirms the FRC’s intentions to transition to the Audit, Reporting and Governance Authority (“ARGA”), the anticipated date for the transition has been pushed back from 2023 to 2024, reflecting delays to the necessary legislation to create ARGA. In addition, the revised plan has been published in draft form and, given that a clear timetable for the Audit Reform Bill remains outstanding, it is possible that this date could slip further.
Enforcement priorities and targets
Whilst the revised plan reflects knock-on delays to some activities, the objectives and deliverables for the Enforcement and Corporate Services divisions remain largely unchanged.
The FRC continue to predict that the current volatile economic climate may lead to an increase in enforcement case volumes in the coming years.
The priorities for the enforcement division remain the same as the previous plan, which include:
- embedding of, and training in new enforcement policies to reflect the Audit Enforcement Procedure (“AEP”) revisions;
- design and delivery of changes to support the implementation of enforcement aspects of regulatory reform;
- increasing focus on liaison and sharing information across the divisions of the FRC;
- the requirement on the enforcement supervisor liaison to support constructive engagement;
- increasing input from experienced accounting and audit professionals at earlier stages in the enforcement process; and
- increasing case team and operational resourcing.