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Non-Enforcement Led Public Oversight of Financial and Corporate Governance Disclosures and of Auditors

69 Pages Posted: 24 Mar 2008  

Kathryn Cearns

Herbert Smith

Eilis Ferran

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: March 2008

Abstract

This paper examines the UK's system for public oversight of financial and corporate governance disclosures by issuers and of auditors, taking account of the framework of European law and institutional arrangements within which that system operates. The paper examines the role of the public bodies that are responsible for oversight and how they relate to the Financial Services Authority (FSA). By presenting a detailed picture of this part of the UK's supervisory infrastructure, the paper demonstrates that there is a more complex allocation of institutional power than the impression that may be created by the emphasis on the FSA as the UK's single financial regulator. The paper also considers strategies that the various bodies employ to promote compliance so as to explain why analysis based exclusively on formal enforcement data is liable to be misleadingly incomplete. By seeking to improve the quality of the basic data about the UK and drawing out features of the system that may not be easy to capture in objective measurements, the paper contributes to the task of addressing the crucial question: what substitutes for the very heavy reliance on public enforcement in the form of penalties and other punitive measures that is associated with the United States in other credible and effective systems of regulation and supervision?

Keywords: companies, capital markets, financial disclosures, audit, public oversight; enforcement

JEL Classification: G18, G28, G38, K22

Suggested Citation

Cearns, Kathryn and Ferran, Eilis, Non-Enforcement Led Public Oversight of Financial and Corporate Governance Disclosures and of Auditors (March 2008). ECGI - Law Working Paper No. 101/2008. Available at SSRN: https://ssrn.com/abstract=1111779 or http://dx.doi.org/10.2139/ssrn.1111779

Kathryn Cearns

Herbert Smith ( email )

Exchange House
Exchange Square
London, EC2A 2HS
United Kingdom

Eilis Ferran (Contact Author)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge CB3 9DZ
United Kingdom
+ 44 1223 338335 (Phone)
+ 44 1223 338340 (Fax)

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