EVENT: Sir John Kingman’s Independent Review of the Financial Reporting Council
- Sir John Kingman, Chair of the Independent Review of the Financial Reporting Council & Chair, Legal and General
- Chaired by Lord Sharkey
- 9.00am-10.15am, Thursday 16th May 2019, Committee Room 14, House of Commons
- To register please email dominic.lindley@newcityagenda.co.uk
Sir John Kingman will discuss the recommendations of his Independent Review of the Financial Reporting Council and his proposals for a new, stronger, statutory regulator to oversee accounting and audit.
Inquiries into Carillion and BHS identified flaws in the auditing of those companies and there have been subsequent failures such as Patisserie Valerie. The FRC failed to robustly investigate the role of auditors during the financial crisis. It has been criticised by two Select Committees as reactive, timid, a weak enforcer and too close to those it regulates.
Sir John Kingman’s Independent Review of the Financial Reporting Council recommends that it should be replaced with a new regulator with clear statutory powers and objectives. The Kingman Review made 83 recommendations in total, including putting the new organisation in charge of regulating major audit firms, ending self-regulation through trade associations, and for reviews of audit quality and corporate reporting to be made public.
The new Audit, Reporting and Governance Authority will have new leadership and a streamlined independent board. It will be a stronger regulator, avoiding the “excessively consensual” approach identified by Sir John. Alongside his Independent Review, the Secretary of State asked Sir John to consider whether there was a case for change in the appointment of a company’s auditors and how their fees are set. Sir John’s response sets out a thorough exposition, highlighting concern that the current framework does not support auditors’ need to act with scepticism and challenge in the interests of shareholders; but it stops short of proposing major change.
The Government is currently consulting on implementing the 83 recommendations and is committed to introducing legislation as soon as Parliamentary time allows. It is also considering the case for a strengthened framework around internal controls on a similar basis to the Sarbanes-Oxley regime in the United States.
Sir John Kingman is chairman of Legal & General. He was Second Permanent Secretary to HM Treasury, with responsibility for policy on business, financial services and infrastructure. He was closely involved in the UK response to the financial crisis, handling the resolution of Northern Rock and leading negotiations with RBS, Lloyds and HBOS on their £37bn recapitalisation. He was the first Chief Executive of UK Financial Investments and was Global Co-Head of the Financial Institutions Group at Rothschild.
Do join us for what we expect to be an insightful event. Please could you confirm your attendance by contacting dominic.lindley@newcityagenda.co.uk
