Penrose Foss

The review draws on the regulator’s enforcement activity over the past year and identifies lessons for audit firms and companies, with a focus on improving the quality of financial reporting, audit work and firm-level systems and controls.

The FRC said insights gathered through investigations are also being used to inform its wider supervisory work and the development of regulatory standards across the audit market.

The report also details changes to the regulator’s enforcement process under its revised Audit Enforcement Procedure. The reforms introduce new routes to resolving cases earlier, with the aim of delivering more timely outcomes while maintaining the rigour needed to uphold confidence in the UK’s audit regime.

Penrose Foss, executive counsel and executive director of enforcement and investigations at the FRC, said: “The FRC’s enforcement activity underpins public and investor confidence in financial reporting and audit by holding to account those responsible for misconduct or serious and significant errors, and, importantly, doing so in a way which gives a full, fair and clear exposition of the basis of our findings for maximum educative and deterrent value.

“Looking ahead: our revised approach to enforcement is designed to combine proportionality, rigour and quality in our investigation processes with a view to achieving more timely outcomes. Those, in turn, should help drive swifter improvements in financial reporting and audit across the board.”

The publication forms part of the FRC’s ongoing efforts to strengthen governance and confidence in UK financial reporting, while providing firms with practical insights into the standards expected by the regulator.