Head Of UK’s Financial Reporting Council Quits Amid Scrutiny

The head of the U.K.’s Financial Reporting Council is reportedly stepping down from the position amid continued scrutiny that the FRC lacks effectiveness to prevent corporate accounting scandals and industry failures.

Reports in Reuters on Friday (Nov. 2) said FRC chief executive Stephen Haddrill will leave the post as the government continues its review of the watchdog. He had been in the position for nearly nine years, the publication said; while the exact date of Haddrill’s departure is unknown, the FRC said it will happen late next year.

“I am incredibly proud to have led the FRC for nearly nine years,” said Haddrill in a statement. “However, I believe that it should be the job of a new CEO to lead the FRC when the way ahead is decided.”

Some lawmakers have called upon the government to break up the FRC into two separate bodies that may be more effective at preventing accounting failures.

Sir John Kingman, a civil servant asked by U.K. government officials to head a review of the Financial Reporting Council, continues his probe into the body after criticism that the FRC lacked teeth to adequately prevent corporate failures, including the collapse of construction government contracting giant Carillion. Reports said Kingman is expected to complete the review by the end of the year.

Some policymakers have openly criticized the FRC, calling the body “timid” and accusing it of being too slow to complete investigations and adequately fine companies discovered to have engaged in financial misconduct. The body has recently issued record fines against companies it has investigated in the wake of that criticism.

As Kingman continues his FRC probe, the Competition and Markets Authority is also moving forward with its own investigation of the U.K.’s auditing market as some policymakers have called on the government to break up the nation’s Big Four accounting firms. Those companies have also faced criticism for failing to recognize and prevent accounting failures at top firms, Carillion included. The CMA’s report is expected to be published by the end of the year as well, reports said.