It has been announced that the Financial Reporting Council (‘FRC’), the accounting watchdog, is to be closed down and replaced by a new regulator to be known as ARGA. This stands for the Audit, Reporting and Governance Authority. There have been a number of high profile audit failures in recent years and the big accountancy firms are far from conflict free in that they usually make more in consultancy fees from clients than audit work. When they get caught out, they get a slap on the wrist from the present regulator, the public perception being that the current regulation is made up of an “old boy” network, formed by their former mates from the big four accountants.
It may be that they have got away with these blatant conflicts of interest for many years because the accountancy and audit industry is mind-numbingly boring and the subject of widespread public apathy. One does not expect too much from the proposed reforms. Apart from a new acronym and a new logo, one would expect that the present staff of the FRC will be taken over and that business will continue largely as normal.
It is a trick well tried and tested by the National Crime Agency (‘NCA’) which has had more than one makeover. The signs above the door having changed from the Serious Organised Crime Agency (‘SOCA’) and before that the Asset Recovery Agency (‘ARA’).
Plus ça change.
It has been announced that the Financial Reporting Council (‘FRC’), the accounting watchdog, is to be closed down and replaced by a new regulator to be known as ARGA. This stands for the Audit, Reporting and Governance Authority. There have been a number of high profile audit failures in recent years and the big accountancy firms are far from conflict free in that they usually make more in consultancy fees from clients than audit work. When they get caught out, they get a slap on the wrist from the present regulator, the public perception being that the current regulation is made up of an “old boy” network, formed by their former mates from the big four accountants.
It may be that they have got away with these blatant conflicts of interest for many years because the accountancy and audit industry is mind-numbingly boring and the subject of widespread public apathy. One does not expect too much from the proposed reforms. Apart from a new acronym and a new logo, one would expect that the present staff of the FRC will be taken over and that business will continue largely as normal.
It is a trick well tried and tested by the National Crime Agency (‘NCA’) which has had more than one makeover. The signs above the door having changed from the Serious Organised Crime Agency (‘SOCA’) and before that the Asset Recovery Agency (‘ARA’).
Plus ça change.