FRC to expose companies that fail to report accurate information

by Richard Crump

More from this author

16 Apr 2014

  • Financial Director
  • Comments
Financial Reporting Council

COMPANIES will be forced to admit when they have investigated by the FRC's conduct committee for failing to provide accurate information in accounts or reports, under proposals put forward by the reporting watchdog.

As part of amendments to the way it reviews company reports, the FRC plans to name and shame those companies that are asked to make changes to their accounts following an inquiry by its conduct arm.

Such requests are rare - the FRC's conduct arm reviews about 250 sets of company accounts a year, and, typically, writes to anything up to half that number of companies.

Currently, companies can choose whether they refer to any changes ordered by the FRC, as aerospace manufacturer Rolls-Royce did in February when it restated figures following an FRC review that resulted in a change to the way it accounts for entry fees.

Under the revised operating procedures, put out to public consultation earlier this week, company explanations for failing to adhere to the rules must be" fair and balanced", while the FRC will also need to be allowed to comment on company disclosures in light of engagement with its conduct committee.

"Our original practice was not to seek any further publicity in respect of committee references which are not mentioned in the current operating procedures. However, the steady rash of failures and disappointments emanating from within the business and financial community during the recent economic crisis raised a question concerning the trustworthiness of corporate activity," the consultation document said.

"We now operate in a regulatory environment where increased transparency is both expected and required in order to restore trust."

Other amendments comprise an explanation that the conduct committee's letter to a company may include references to aspects of reporting other than compliance with mandatory reporting requirements; for example, cutting clutter; recording that, where practicable, the conduct committee's opening letter to the company chairman is copied to the finance director and audit committee chairman; and providing more information about how the conduct committee manages complaints.

The consultation is open to 16 June 2014.

Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication


Charterhouse Accountants

Finance Officer

Charterhouse Accountants, Beaconsfield, Permanent, Full Time, £ Competitive




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.