U.K. Government Plans to Replace FRC With New Audit Watchdog

The U.K. government will move forward with plans to abolish the heavily criticized Financial Reporting Council and replace it with a tougher regulator.

The government will set up an accounting watchdog called the Audit, Reporting and Governance Authority with the power to issue stronger sanctions.

The approach was outlined in a report by Legal and General Plc Chairman John Kingman in December, who accused the FRC of being too close to the firms it oversaw, especially the largest firms known as the “Big Four.“

Stung by a string of scandals at prominent British companies including Carillion Plc, the government demanded ...