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Financial watchdog to probe reports of 40 small firms

Financial watchdog to probe reports of 40 small firms

The Financial Reporting Council (FRC) has announced a thematic review to improve corporate reporting and auditing in the 2018-19 financial year, including the effects of Brexit on how companies disclose their risks

It will write to 40 smaller listed and AIM quoted companies before their year end, informing them that it will review two specific aspects of their next published reports and accounts. 

These aspects will be drawn from five areas recently featured in FRC thematic reviews or Financial Reporting Lab reports, where the FRC has published examples of what better quality disclosures might look like.

The topics for the year will be split into corporate reporting and auditing. On the corporate reporting side, the FRC will be targeting smaller listed and AIM quoted company reports and accounts, and looking at the effect of IFRS on revenue and financial instruments on companies’ 2018 accounts.

The organisation will also look at the effects of Brexit on how companies disclose principal risks and uncertainties, it said.

On the audit side, the thematic reviews will include a look at transparency reporting in firms with public interest entity audits as well as an assessment of the use of audit quality indicators.

The focus will be on the oil and gas sector, general retailers and business support services.

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