In Practice News
In Practice News
Leading Financial Market Participants Call for Stronger Alignment of Regulatory & Standard Setting Efforts around Sustainability Disclosure
The global accountancy profession is on a journey—along with investors, companies, regulators and other stakeholders—toward a unified, coherent, global and authoritative standard-setting process for reporting on sustainability information.

IFAC welcomes the establishment of the International Sustainability Standards Board (ISSB), as well as jurisdiction or regional initiatives that can contribute toward the creation of a global system for consistent, reliable and assurable sustainability disclosure. 

In a joint statement today, IFAC joins with leading capital markets participants—PRI (Principles for responsible Investment) and WBCSD (World Business Council for Sustainable Development)—in calling for simplicity and alignment in the standard-setting process.  At this critical juncture, regulatory and standard-setting fragmentation must be avoided through efforts to align key concepts, terminologies, and metrics upon which disclosure requirements are built.

Read the statement on IFAC’s website or download the PDF here.


FRC publishes latest audit quality review results
The Financial Reporting Council (FRC) has published its annual inspection and supervision results of the largest audit firms (BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars and PwC). Overall, 75% of audits inspected were good or required limited improvement (compared to 71% in 2021 and 67% in 2020).

The number of audits considered good or requiring limited improvement has improved on the previous two years. It is clear that a combination of the FRC’s increasingly assertive supervision approach, as well as investment from the firms in their systems, people and capabilities to improve audit quality, is starting to have a positive impact.  

Encouragingly, five of the largest firms had no audits requiring significant improvements. KPMG’s individual audit inspections have significantly improved, which is promising, but is not yet a trend.

The FRC will continue to closely monitor KPMG banking audits.

The inspection results at Mazars and BDO remain unacceptable. Four of the eight audits reviewed at Mazars, and five of the 12 audits reviewed at BDO required more than limited improvements. Specific supervisory plans have been developed to closely monitor BDO and Mazars’ priority actions.

The FRC will continue to ensure the challenger firms are prioritising high quality audit with a view to offering increased choice and resilience in the market, but growth ambitions must also be tempered by a focus on quality first and foremost.

Read the FRC audit quality inspection and supervision overview report here 

Read the seven individual audit firm specific reports here


Consultation on funding the Audit, Reporting and Governance Authority
The Financial Reporting Council (FRC) has launched a consultation on its draft proposals for how the new regulator, the Audit, reporting and Governance Authority (ARGA), should be funded.

This follows the Government Response to its consultation on Restoring Trust in Audit and Corporate Governance, which set out its intention to give ARGA statutory powers to raise a levy so that it has a sustainable and independent basis on which to carry out its regulatory activities.

ARGA will play a key role in protecting and promoting the interests of investors, other users of corporate reporting and the wider public interest.

The FRC is seeking the views of its stakeholders on the overall approach to ARGA’s funding, the proposed funding model, and the groups that should fund each of its regulatory activities. This is to ensure ARGA can fulfil its aims and that the right people and organisations are levied proportionately.

Following this consultation, and subject to the Government’s legislative plans, the FRC expects to consult further on detailed aspects of the proposed arrangements, to be contained in a Rule Book.

The consultation will run until Friday, 21 October. Respondents should submit their comments to by close of business on that date.

View the full consultation document here


FRC publishes guidance on running effective AGMs
The Financial Reporting Council (FRC) has released new guidance for listed companies to enhance effective shareholder participation when planning and conducting AGMs. This is the first time the FRC has published specific guidance on the topic.

With input from a wide range of stakeholders, the guidance gives practical advice to help companies ensure that their AGMs are well-run constructive forums for effective engagement. It covers key aspects such as board engagement with shareholders, communication of meeting arrangements, using proxies, and voting processes.

Historically, general meetings have been held in physical venues, however, since the start of the COVID-19 pandemic, many companies have now moved to a hybrid form of meeting using electronic platforms. The new guidance sets out actions to assist companies in making the most of new technologies to increase shareholder engagement.

Recognising that all companies are different, the guidance offers flexibility. Some companies have a small number of shareholders while others have many thousands in multiple jurisdictions, and companies will need to take different approaches and use different technologies and methods depending on their circumstances.

The full guidance is available here.