FRC Enforcement - A Year in Review

The last year has seen businesses continue to deal with the aftershocks of the Covid-19 pandemic, the complexities of Brexit and an unforeseen and seemingly intractable conflict in Ukraine. As the geo-political arena abroad and the economic forecast at home remain uncertain, there is significant pressure on companies to be producing clear and accurate financial reporting, and for auditors to put in place robust procedures to audit them. 

As the regulator of auditors, accountants and actuaries in the UK, and the gatekeeper of the UK’s Corporate Governance and Stewardship Code, the Financial Reporting Council (FRC) plays an integral role in ensuring the highest standards of financial reporting. 

Enforcement is one of the most powerful tools that the FRC has in its regulatory toolbox as an improvement regulator to drive change and ensure auditors and accountants are meeting the high standards expected of them. 

In its 2023 Annual Enforcement Review, the FRC reflects on its enforcement activity over the previous 12 months, identifying themes arising in audit investigations and reporting on the action, including any sanctions, it has taken to incentivise positive behaviours. 

In this publication we share our thoughts on some of the key themes emerging from last year’s FRC enforcement activity, including how the FRC’s approach to enforcement compares with previous years. We identify the trends that have emerged from recent enforcement actions and present our expectations of what is to come in 2024.