Accounting watchdog under fire over FOI queries
The Financial Reporting Council is rarely out of the news... now the accounting watchdog is under fire for its apparent high rejection rate of freedom of information requests.
According to its disclosure log (here), the FRC has answered only five of 51 queries it has had in five years. A quick glance through the log tells us that the FRC sees a lot of the requests as being "outside the scope" of the freedom of information act.
Questions focused on FRC links to the big four accounting firms and things like the collapse of Carillion.
Shocking number of rejections
Suffolk university's accounting professor, Atul Shah, tells the Financial Times that the number of requests outside the FRC's remit is "shocking".
He adds: “This shows there is a real problem within the soul of the FRC. It is a public regulator and not a private members' club, and it [has] clear duties of transparency, accountability and reliability which it has been avoiding over many years.
“A public regulator should have duties to respond to public queries. They have been fobbing them off, not just once or twice but over a long period. That is really shocking. It beggars belief really.”
The FRC, unsurprisingly, didn't accept the criticism.
Its spokesman told the FT: “We don’t think it’s accurate to characterise this as the FRC ‘turning down’ out-of-scope requests or a lack of transparency, any more than it would be fair to characterise an organisation’s reliance on applicable exemptions under the act, where appropriate, as ‘turning down’ requests or a lack of transparency.”
Tax avoidance scheme rumblings
Meanwhile, Grant Thornton is being sued over a tax "planning" recommendation to a client.
R&M Electrical Group says the accounting firm has been negligent. It had recommended the Growth Securities Ownership Plan (GSOP), which offered tax-free or tax-reduced rewards to employees.
Grant Thornton said the GSOP was not tax avoidance scheme but a “legitimate tax planning”. HMRC said the scheme was “ineffective” and tax avoidance. R&M Electrical had to pay a tax bill of £692,364.
HMRC is cracking down on individuals and firms that design and sell tax avoidance schemes.
