The "more confrontational" approach proposed by the panel could "harm the working relationship between the panel and the companies it reviews" and cause unnecessary tension, it added.

PwC said "the prospect of a press notice might well lead to fewer improvements in disclosure as companies might reasonably conclude that they should resist improving their disclosure for fear of a panel press notice. This would be a perverse outcome."

Restatements can lead to questions from investors and other stakeholders over a company's reporting process or stewardship so it's unlikely company boards will greet the changes warmly.

"What we are trying to do is cover the rare possibility that when the panel is quite clear that [company] accounts are defective but the directors are be opstreperous, there's a fall back," an FRC spokesman told CFO World.

, chief executive of the FRC, the regulator has been gradually beefing up its powers.