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Accounting watchdog slashes red tape for UK growth push.

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TL;DR:

  • The City’s accounting regulator, the Financial Reporting Council (FRC), has announced a newly slimmed-down rulebook of reporting requirements for companies, aimed at easing the red tape burden and promoting UK growth and competitiveness.
  • The FRC originally proposed new reporting requirements in May 2023, which included extra diversity and inclusion reporting, higher environmental, social and governance (ESG) requirements, and an annual financial resilience statement. However, these proposals have been significantly scaled back under the newly confirmed plans.
  • The new plans, set to come into force in 2026, emphasise directors’ responsibility for internal controls and risk management. The FRC expects companies to carry out a review of their risk management and internal controls at least once a year.
  • Top City figures have welcomed the new plans, stating that they will promote growth and help revive the appeal of London’s capital markets.
  • The FRC has also maintained the “comply or explain” principle, allowing firms to veer away from strict adherence to the rules if they can provide a rationale.
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