News from the Financial Reporting Council, January 2011.

Publication of Transformations TAS
The BAS published its Specific TAS on Transformations on 16 December 2010. The TAS applies to specified work in relation to both pension and insurance transformations, essentially where there is a change to members’ or policyholders’ benefits without all their consents. The Transformations TAS will apply to work within the scope of the TAS carried out for aggregate reports completed from 1 October 2011. The BAS also published two other related documents:
An analysis of responses to the consultation on the exposure draft which includes a version of the Transformations TAS showing changes made to the exposure draft.
A document setting out some of the significant considerations in the development of the Transformations TAS which practitioners may find helpful.

Funeral Plans TAS
The BAS intends to publish its Specific TAS on Pre-paid Funeral Plans in the next few months. This will complete its initial suite of TASs.

FRC draft plan and levy proposals
On 17 December 2010, the FRC issued a consultation on its draft plan and levy proposals for 2011/12. The document sets out proposed major activities and projects with the proposed budget and levy proposals for 2011/12. The plan focuses on four major outcomes:

  • a stronger and better-informed engagement between institutional investors and company boards;
  • corporate reporting and auditing that deliver greater value to investors and better serve the public interest;
  • a strong UK voice in the EU and international debate on the future regulation of corporate governance, reporting and auditing; and
  • a more effective UK regulatory framework that adds value for investors and other stakeholders at low incremental cost.

The UK Actuarial Profession funds 10% of the actuarial work undertaken by the FRC and its operating bodies (the BAS, the POB and the AADB), with the remainder coming from a voluntary levy on the insurance and pensions industries. The FRC is keen to receive comments on the draft plan and levy proposals from actuaries and users of their work by 10 March 2011.

Update for users of actuarial information
The FRC published its regular update for users of actuarial information on 18 November 2010. The purpose of this document is to assist trustees, directors and others who base their decisions on actuarial information to engage effectively with those providing the information. It discusses some of the key issues that governing bodies should consider in the coming months. It also contains questions which focus on how risks are managed, on understanding the key assumptions and cash flows underlying discounted values and on the quality controls on actuarial work.

Effective Company Stewardship: Enhancing Corporate Reporting and Audit
On 7 January 2011 the FRC published its report ‘Effective Company Stewardship: Enhancing Corporate Reporting and Audit’. The report responds to lessons of the financial crisis and builds on changes already made, such as the new UK Corporate Governance Code and the introduction of the Stewardship Code for institutional investors. The report contains seven key recommendations aimed at improving the dialogue between company boards and their shareholders.

Frequently asked questions (FAQs)
The BAS maintains a set of answers to FAQs to assist practitioners in complying with BAS standards.

Registration for notification of FRC publications
To receive direct notification of BAS, POB and other FRC events and publications, register at the FRC site.

BAS publications
BAS publications including the TASs and supporting documents can be found at the BAS site.