The Interplay Between FRC and ACCA Investigations

The Financial Reporting Council (FRC) and the Association of Chartered Certified Accountants (ACCA) play distinct but interconnected roles in regulating the accounting profession in the UK. While both can investigate potential misconduct, they operate under different mandates.

FRC Investigations: A Broader Scope

The FRC acts as the independent regulator responsible for overseeing corporate governance, audit, and accounting practices. Their investigations focus on a wider range of issues affecting public interest:

• Auditing Standards: Improper audits or failure to comply with auditing standards.
• Accounting Irregularities: Misleading financial statements or accounting practices that distort a company’s financial health.
• Corporate Governance Failures: Breaches of corporate governance codes or directors’ misconduct.

The FRC has the authority to investigate not just individual accountants but also entire audit firms and listed companies. Their investigations can lead to significant consequences, including fines, public censure, and even criminal prosecution.

ACCA Investigations: Member-Centric Focus

ACCA, as a professional body, primarily investigates its members to ensure they uphold the profession’s ethical standards and technical competence. Their investigations typically focus on:

• Breaches of the ACCA Code of Ethics and Conduct: Dishonesty, conflicts of interest, or unprofessional conduct by members.
• Professional Negligence: Providing inaccurate or misleading financial information or advice.
• Lack of Competence: Demonstrating a skillset inadequate for the task undertaken.

ACCA’s disciplinary actions are typically directed towards its members, ranging from reprimands to suspension or expulsion from ACCA.

When Paths Converge: Collaborative Investigations

While FRC and ACCA have distinct mandates, their paths can converge in certain situations:

• Joint Investigations: For complex cases involving both auditing irregularities and ethical misconduct by an ACCA member, the FRC and ACCA may collaborate on an investigation.
• Information Sharing: The FRC may share investigation findings with ACCA if they involve potential ethical breaches by an ACCA member.
• Disciplinary Action: If the FRC’s investigation reveals ethical misconduct by an accountant, they may report it to ACCA, who can then take their own disciplinary action.

Click here for more information on ACCA investigations.

Click here for more information on Financial Reporting Council investigations.