LOOKING FORWARD TO XBRLENABLED REPORTING 10 th XBRL

LOOKING FORWARD TO XBRLENABLED REPORTING 10 th XBRL INTERNATIONAL CONFERENCE 16 November 2004 Paul Boyle Chief Executive

AGENDA • • • The FRC’s aim Our functions and objectives Our regulatory philosophy Big issues for 2004/05 XBRL’s potential contribution

DEDICATIONS

The FRC’s aim … is to promote confidence in corporate reporting and governance

The FRC’s functions • Setting, monitoring and enforcing accounting standards • Setting, monitoring and enforcing auditing standards (including ethical standards for auditors) • Statutory regulation of auditing • Oversight of the professional accountancy bodies • Independent investigation and disciplinary scheme • Promoting high standards of corporate governance The FRC has 5 main operating units

Our objectives • Improve the quality of corporate reporting • Improve the quality of auditing • Promote high standards of corporate governance • Promote the integrity, competence and transparency of the accountancy profession • Improve the FRC’s effectiveness

Our regulatory philosophy • A well-informed market is the best regulator • Targeted use of powers (proactive, risk-based, proportionate) • Principles and clarity in standards and codes • Consultative, practitioner decision-making … but independent • Promote appropriate international approaches • Transparency, accountability and awareness

Big issues for 2004/05 • • • IFRS Operating & Financial Review Insurance accounting Proactive enforcement of accounting standards International Standards on Auditing Audit inspection Speeding up the disciplinary process Monitoring Combined Code implementation Review of Turnbull Guidance on internal control

XBRL’s Potential Contribution • Improving the quality of corporate reporting • Improving the FRC’s effectiveness

Improving the Quality of Corporate Reporting • Direct effects – Speed – Accuracy – Drill-down capability • Indirect effects – Improving market scrutiny – Peer pressure • FRC supports market-based development of XBRL

Improving the FRC’s Effectiveness • Commitment to be risk-based and proportionate • Universe of financial statements and audits to be reviewed exceeds capacity • XBRL’s potential to improve efficiency – Automating routine tasks • XBRL’s potential to improve effectiveness – Improved analytical capability

Promoting confidence in corporate reporting and governance