Does the FRC have more bark than bite?

A spate of multimillion pound fines for misconduct at audit firms following dubious audits at listed companies has put the audit regulator, the Financial Reporting Council (FRC), under greater pressure, but is it fulfilling its role and displaying real powers, ask partner Hannah Laming and associate Nicholas Querée of law firm Peters & Peters

In recent months, commentators in a number of national newspapers alleging that the FRC is ineffectual and lacklustre. To call the FRC out as toothless sits uneasily with the regulator’s recent track record.

The FRC gives every appearance of flexing its enforcement muscles: the regulator continues to break its own records for the imposition of fines, culminating in August 2017 with the £5.1m imposed on PwC for failures in its auditing of RSM Tenon.

It has also opened investigations in response to every recent high-profile case of alleged corporate misconduct: Tesco, BHS, Rolls-Royce, etc. So, is the recent criticism made against the FRC fair?

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