The Financial Reporting Council (FRC) is committed to improving standards in accountancy, auditing, and actuarial. They have the power to set and enforce each standard, working to improve quality and make the UK a more attractive climate for investment.
The FRC has a tough job on their hands and have been encouraged to increase the fines they charge for misconduct. In the 12 months to October 2017 they did just that, issuing £12.8 million in penalties. This was a rise from the £6.8 million they issued in the previous year.
Surprisingly in issuing almost double the fines the FRC broke the record on two different occasions for the largest individual fine. The first of these was in May 2017 when they penalised PwC, a leading professional services firm, for misconduct regarding how they handled a 2010 audit of Connaught, a social housing maintenance group that went into administration. A fine of £5 million was issued.
The second record-breaking fine was also issued to PwC. This time it was for “excessive misconduct” in relation to their audit of RSM Tenon, another professional services group that went into administration in 2013. The penalty for £5.1 million was issued in August.
There is more pressure for FRC to continue increasing their fines to ensure they are a more effective deterrent to misconduct. Although they are rising and heading in the right direction, there is a huge different between the penalties they issued for the year compared and what the Financial Conduct Authority (FCA) delivered to businesses. In January they fined Deusche Bank £163 million. Even this was less than the £284 million they fined Barclays in 2015.
The FRC is currently in the process of reviewing its rules and revising the size of penalties. It is expected they will publish the results before the end of the year.
With the above accountants and other financial services providers will need to be wary and ensure they meet the relevant standards. Luckily if you choose to work with Brian G. Lonis you have no concerns. Our team is made up of the best accountants Walthamstow has to offer. They are highly qualified and we always work to the very highest standards.
If you have any questions or would like to arrange a professional service from an established company please contact us. We work with businesses of all shapes and sizes as well as individuals.