The announcement by Greg Clark, the business secretary, that he plans to order a review into the Financial Reporting Council (FRC) will send shock waves through Britain’s top accountancy regulator.

The future of the FRC, dubbed “useless and toothless” by some MPs for not being tough enough on auditors that fail to spot problems at companies that later collapse, may be in doubt if an independent inquiry into its operations is launched.

The FRC was founded in 1990 and is the senior regulatory body for accountants with powers to fine them or ban them from practising. It also makes and polices the rules on board governance and shareholder stewardship, as well as regulating actuaries.

The collapse of several major investigations has led to accusations of ‘industry capture’ of the FRC by the Big Four accountancy firms.

Its time to re-examine the FRC’s mandate, as well as its leadership.