Osborne Clarke has reviewed the FRC's 2020/21 strategy document. From an audit and enforcement perspective the key messages are:
An increased focus on Audit Quality Reviews (AQRs), with an anticipated increase in the number of AQRs from 130 in 2019/20 to between 145 and 165 in 2020/21. We therefore expect a continuation of the trend of enforcement arising directly from AQRs.
Enforcement will take place where proportionate and in the public interest, with the FRC promising to be "fair but tough." We expect to see an increase in enforcement activity, with the FRC projecting increased spend on and recruitment into the enforcement division.
The FRC is aiming to speed up its investigation and enforcement processes, with a stated desire to deliver primary reports within two years of the start of an investigation where possible. To do this the FRC aims to recruit a further 13 forensic accountants and 6 lawyers.
The FRC will enhance its case examination function, which decides whether to open an investigation or seek other constructive methods of engagement and resolution.
The supervisory arm of the FRC is also to be augmented, in line with the FRC's aim to "build and deepen" supervision of the major audit firms.