FRC—Executive Counsel decision on whether to bring Formal Complaint
Produced in partnership with Thomas Daniel of 2 Bedford Row
FRC—Executive Counsel decision on whether to bring Formal Complaint

The following Corporate Crime practice note produced in partnership with Thomas Daniel of 2 Bedford Row provides comprehensive and up to date legal information covering:

  • FRC—Executive Counsel decision on whether to bring Formal Complaint
  • FRC Guidance on the delivery of formal complaints
  • The evidential test applied by the Executive Counsel
  • The public interest test applied by the Executive Counsel

FORTHCOMING CHANGE ALERT: The UK government has announced that the Financial Reporting Council (FRC) will be replaced with a new regulator called the Audit, Reporting and Governance Authority. This new enhanced regulator will transform the audit and accounting sector in response to the comprehensive Independent Review led by Sir John Kingman. See: LNB News 11/03/2019 120.

FRC Guidance on the delivery of formal complaints

FRC Guidance states that the Executive Counsel must deliver a Formal Complaint to the Conduct Committee against a Member or Member Firm liable to disciplinary proceedings if, having conducted an investigation and having reviewed any written representations submitted by the Member or Member Firm, they consider that two tests are satisfied:

  1. that there is a realistic prospect that a Disciplinary Tribunal will make an Adverse Finding against a Member or Member Firm (the evidential test) and

  2. that a hearing is desirable in the public interest (the public interest test)

An Adverse Finding is defined in the Accountancy Scheme (Scheme) as a finding by a Disciplinary Tribunal that a Member or Member Firm has committed an act of Misconduct or has failed to comply with any of their or its obligations under paragraphs 14(1) or 14(2), ie to co-operate with the Executive Counsel and produce or allow inspection of documents under their control.

Misconduct is defined in the Scheme as an act(s) or omission(s) by

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