The Financial Reporting Council's Annual Review sets out the findings of its monitoring of UK companies’ annual corporate report and accounts, alongside its expectations for the upcoming reporting season. Their upcoming webinar explores this year's key findings from the review.
The FRC's report is an essential resource for preparers and auditors of financial statements, investors, and other stakeholders; for NEDs, it provides a crucial perspective on the current state of corporate reporting, and highlights areas where they can add value in their roles.
Overall, the FRC is pleased that the quality of reporting in the FTSE 350 has been maintained, and that there have been improvements in several reporting areas, with provisions and contingencies falling out of the ‘top ten’ issues for the first time in over five years.
This year the FRC also questioned significantly fewer companies in relation to their disclosure of judgements and estimates, another area that has featured in the top ten for many years.
However, The FRC was disappointed that there has been an increase in the number of restatements in relation to impairment of assets and cash flow statements, predominantly in companies outside the FTSE 350, where we are seeing some evidence of a widening gap in quality. These will remain areas of close focus for the FRC.
Companies and their auditors may reduce the risk of challenge by closely reviewing the FRC’s findings to avoid similar breaches of reporting requirements in the future.
The FRC will continue to take a proportionate and targeted approach to its monitoring to ensure companies comply with the relevant reporting requirements. They do not expect companies to provide information in their annual reports and accounts that is not material or relevant to users.
In relation to sustainability reporting, the FRC was pleased that, given the complexities for reporters, there were comparatively few compliance issues in premium-listed companies’ reporting against the Taskforce for Climate-related Financial Disclosures (TCFD) framework.
This webinar from the FRC will explore some of these key findings in more depth.
Learn more:
Register your place for the webinar at the link above. To read the full report and learn more about the annual review ahead of the webinar, be sure to check out the insight linked here.