The Financial Reporting Council (FRC) has been in dialogue with other regulators including the Financial Conduct Authority and Ofgem regarding KPMG’s work in relation to Drax’s biomass sustainability reporting. As KPMG’s work for Drax was undertaken as an advisory review rather than as statutory audit work, this does not fall within the FRC’s statutory audit regulatory remit. The FRC continues to monitor this case and will consider any further relevant information.

The government recognises the importance of having an effective and proportionate regulator of the audit sector and the significance of having a regulator that has the right legislative set-up to do the job. At present, the Financial Reporting Council (FRC) will not transition to become the Audit Reporting and Governance Authority (ARGA). The name of the regulator is less important than its effectiveness. The FRC has already undergone a substantial transformation since 2018, and we intend to put it on a proper statutory footing as soon as there is availability within the parliamentary schedule.

The Government will look to put the Financial Reporting Council on a statutory footing as soon as parliamentary time allows. We will set out next steps in due course.

The Financial Reporting Council (FRC) has taken on several new responsibilities following its (2016) designation as competent authority for audit, and additional work resulting from the UK's exit from the European Union. These include the registration of additional third country auditors, a new programme of assessing third country audit regulatory equivalence and adequacy, and supporting agreements on the mutual recognition of professional qualifications. The FRC has also put extra resource into the supervision of audits and expediting enforcement proceedings.

Staff costs have increased in direct proportion to the increase in headcount.

Since 2005, the remits of the Competition and Markets Authority (CMA), which became operational on 1 April 2014, and the Financial Reporting Council (FRC) have expanded in scope to undertake additional functions at the request of government.

The CMA's responsibilities in respect of competition enforcement and merger control have increased following the UK’s departure from the EU, as well as taking on new statutory functions and responsibilities under the UK Internal Market Act 2020, and the Digital Markets, Competition and Consumers Act 2024.

The FRC took on formal responsibility for actuarial oversight and standard-setting in 2006, for stewardship in 2009 following the Walker Review, as well as being designated as the competent authority for audit in 2016.

Since 2005, the remits of the Competition and Markets Authority (CMA), which became operational on 1 April 2014, and the Financial Reporting Council (FRC) have expanded in scope to undertake additional functions at the request of government.

The CMA's responsibilities in respect of competition enforcement and merger control have increased following the UK’s departure from the EU, as well as taking on new statutory functions and responsibilities under the UK Internal Market Act 2020, and the Digital Markets, Competition and Consumers Act 2024.

The FRC took on formal responsibility for actuarial oversight and standard-setting in 2006, for stewardship in 2009 following the Walker Review, as well as being designated as the competent authority for audit in 2016.

The latest available data is:

(1) The Financial Reporting Council – 459 staff – taken from 2024/25 Annual Report and Accounts published 22 July 2025; and

(2) The Competition and Markets Authority – 1,112 staff – taken from CMA: workforce management information published 31 July 2025.

Guidance issued by the Financial Reporting Council does not change any legal requirement. The issuance and/or application of this guidance would not therefore have caused a change in the going concern basis of accounting assessment.