Audit Watchdog Strengthens Professional Body Supervision 

PARN Global News Article - 7th June 2023

The accounting watchdog in the UK has made changes to its team responsible for overseeing professional bodies in preparation for its transition into a new independent regulator, as outlined by the government's plans. On Thursday, the Financial Reporting Council (FRC) announced that it has restructured its professional oversight team as part of a strategy formulated by the board in 2022. The aim is to deepen and strengthen supervision of certain professional bodies.  

Dhruve Shah has been appointed as a deputy director and will assume his role on July 31. His main responsibility will be to support the supervision of managers within the restructured team, which has been renamed the professional bodies supervision team. Shah will be leaving his current position as a key audit partner at the National Audit Office, where he handles audits for various government departments, charities, and international intergovernmental organizations. The establishment of a new regulatory body, known as the Audit, Reporting and Government Authority (ARGA), is underway due to a series of auditing failures, especially due to certain cases from 2018 that should be addressed correctly so that they can be avoided in the future.  

The government commissioned a comprehensive review of the sector led by John Kingman, the chair of Legal & General, who highlighted areas where the FRC could benefit from improvements. The review emphasized the need for the FRC to have enhanced powers to effectively address systemic issues within businesses. Kingman's observations provided valuable insights for the ongoing efforts to strengthen the regulatory landscape. The announced restructuring is part of an ongoing process initiated by the FRC ahead of the legislation required to establish its replacement. The timing for the legislation will be determined by the availability of parliamentary time.