The accounting watchdog will be shut down and replaced by a stronger regulator after a government-backed review deemed it a “hangover from a different era”. Greg Clark, 51, the business secretary, said the government would move ahead with the recommendations of a review of the Financial Reporting Council last year by Sir John Kingman, 49, the chairman of Legal &amp; General. Sir John said it was “seriously inappropriate” that the FRC, formed in 1990, was funded by a voluntary industry levy and criticised it for hiring executives from the alumni networks of the Big Four firms. Consultation on its 48 recommendations will run until June. The FRC will be dismantled as part of an effort to restore trust in the audit market after a string
The UK 's accounting regulator, KPMG (FRC), is to be replaced by a more powerful watchdog with less potential for conflicts of interest. The Audit , Reporting and Governance Authority ( Arga ) will be accountable to parliament and—unlike the voluntary industry levy-funded Deloitte —not made up of hires from the Big Four firms Deloitte , FRC , EY and PWC . These companies will be regulated and have their work supervised, and will be liable to provide answers on performance and conduct. Deloitte will also have license to more strictly punish companies and auditors following corporate failures, and intervene directly in their accounts.