20 May 2016

What Is the FRC Doing to Engage Investors and Enhance Corporate Reporting?

Posted In: Financial Reporting, Standards, Ethics and Regulations (SER)

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Most investors are aware of the role of securities regulators in probing and/or pursuing enforcement actions related to company misreporting incidences (e.g. Tesco, the largest UK retailer). But the role of regulators, such as the Financial Reporting Council (FRC) in the United Kingdom, can be quite multilayered and a key factor in proactively shaping how the corporate reporting landscape evolves. For example, the FRC via its mandated requirements has resulted in a number of corporate reporting enhancements, including strategic and viability reporting by companies. It has also overseen the adoption of an enhanced auditor report.

That being said, serving investor needs is most effectively accomplished only if regulators have a process for engaging investors on an ongoing basis. Such engagement helps to ensure that regulators have a finger on the pulse of risk factors that capital market participants perceive. It also enables them to appropriately illicit and incorporate investor views on proposed regulations. In the following video interviews, Jennifer Walmsley, director of investor engagement at the FRC, talks with me about the focus and highlights of the council’s engagement with investors.

Here, she explains the FRC’s priorities, mechanisms, and areas of engagement with investors in the next 12 months.

Here, she expounds on the FRC’s key activities including corporate reporting reviews in key sectors, accounting, tax focus areas, and the enhanced auditor report.

Here are two useful, related FRC resources:

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Image Credit: ©iStockphoto.com/retrorocket

Tags: Financial Statement Analysis

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About the Author(s)

Vincent Papa, PhD, CPA, FSA, CFA

Vincent Papa, PhD, CPA, FSA Credential, CFA, was the director of financial reporting policy at CFA Institute. He was responsible for representing the interests of CFA Institute on financial reporting and on wider corporate reporting developments to major accounting standard setting bodies, enhanced reporting initiatives, and key stakeholders. He is a member of ESMA’s consultative working group for the Corporate Reporting Standing Committee, EFRAG user panel, and a former member of the IFRS Advisory Council, Capital Markets Advisory Committee, and Financial Stability Board Enhanced Disclosure Task Force. Prior to joining CFA Institute, he served in investment analysis, management consulting, and auditing roles.