A rare alliance of the Big Four and mid-tier firms is pushing the FRC to abandon its controversial ‘name and shame’ policy. As the regulator weighs its growth-focused mandate against public transparency, we examine why the profession believes early disclosure has become a disproportionate threat to individual reputations and UK competitiveness.
In what is being described as a rare and significant display of industry-wide solidarity, the UK’s leading accounting firms have launched a coordinated effort to force a rethink at the Financial Reporting Council (FRC).
The objective? To end the regulator’s long-standing policy of “naming and shaming” firms and companies at the very beginning of an investigation.
This isn’t just a grievance from the Big Four, Deloitte, EY, KPMG, and PwC. In a move that signals deep-seated frustration across the profession, they have been joined by mid-tier heavyweights including BDO, Grant Thornton, RSM, Forvis Mazars, and Crowe. Perhaps most telling is the backing of the ICAEW and ACCA, suggesting that this isn’t merely a corporate defensive maneuver, but a fundamental challenge to the proportionality of UK audit regulation.
The push to end the ‘name and shame’ practice centers on the FRC’s default habit of announcing probes the moment they are launched. Under current protocols, the FRC typically discloses the name of the audit firm, the company involved, and the specific financial year under review.
While the FRC maintains that it rarely names individual partners at this nascent stage, the reality in the age of digital transparency is quite different. For any journalist or curious stakeholder, a quick search of Companies House for the relevant audit report immediately identifies the signing partner.
The consequences for that individual can be devastating. Investigations by the FRC are notoriously slow, often stretching over several years. During this time, a partner’s career is effectively put on ice; they may struggle to win new business, find their internal promotion prospects stalled, and face significant personal stress, all while the “reasonable grounds to suspect” misconduct have yet to be tested in a formal hearing.
As one source close to the lobbying effort noted, the early publicity pursued by the FRC is increasingly viewed as “out of kilter” with modern, proportionate regulation. The argument is simple: unless there is an immediate risk to market stability, the public’s right to know should not supersede the right to a fair, private process until a breach is actually established.
The FRC is not entirely deaf to the calls for modernization. Their recent consultation, which closed this past Friday, proposes a more nuanced enforcement toolkit. Rather than the binary “investigate or ignore” approach of the past, the regulator is looking at “Published Constructive Engagement,” which would act as a middle ground where minor failings are made public without the scorched-earth impact of a full-scale investigation.
Furthermore, the regulator is considering an “Accelerated Procedure” to reward firms that admit to failings early with faster resolutions, alongside a “Self-Review” model where firms conduct their own oversight-monitored reviews in specific cases. While the profession has broadly welcomed these pragmatic alternatives, the sticking point remains the announcement policy. If the FRC continues to lead with a public announcement of a probe, the incentive for firms to engage in these “faster” routes is significantly diminished, as the reputational damage is already done on day one.
The timing of this revolt is no coincidence. The accounting sector is clearly taking a leaf out of the banking industry’s playbook. Last year, the Financial Conduct Authority (FCA) was forced into a high-profile U-turn after its own plans to name and shame companies under investigation met with a fierce backlash from the City of London and the government.
The FCA ultimately abandoned its proposals amid concerns that aggressive “naming” was driving business away from the UK at a time when the Treasury is desperate to signal that Britain is “open for business.” With the FRC now operating under a similar mandate to support UK competitiveness and economic growth championed by CEO Richard Moriarty since his arrival in 2023 the firms believe they have a winning argument.
The departure of several “tough-on-audit” figures from the FRC in recent months further suggests a changing of the guard. The regulator is under pressure to move away from what some described as a “prosecutorial culture” toward a model that prioritizes systemic improvement over public reprimands.
The FRC has acknowledged the “strong engagement” with its consultation but remains non-committal, stating it will review its publication policy in light of the feedback. However, with the Big Four and the mid-tier presenting a unified front, the status quo feels increasingly unsustainable.
For the wider accountancy community, this battle represents a turning point. If the FRC yields, we could see a shift toward a more private, evidence-led regulatory environment where public naming is reserved for the most “egregious misconduct.” If they dig in, the tension between the regulator and the regulated could reach a breaking point, potentially complicating the very audit quality improvements the FRC is trying to achieve.
