PracticeAuditImplementation of non-financial reporting should build on existing UK regime, says ICAEW

Implementation of non-financial reporting should build on existing UK regime, says ICAEW

Building on well-established reporting regime would minimise disruption, ICAEW says

Implementation of non-financial reporting should build on existing UK regime, says ICAEW

THE UK GOVERNMENT should build on its existing strategic report regime when implementing the EU’s non-financial reporting directive, according to ICAEW.

In their response to the Department for Business Innovation and Skills’ (BIS) Call for view on effective reporting alongside proposals to implement EU requirements, the institute highlighted the importance of avoiding unnecessary confusion and duplication of work.

The directive introduces new non-financial reporting requirements for some large public-interest entities, with effect from 1 January 2017. BIS has asked for views on the best way to introduce the new requirements in the UK before the EU implementation deadline of 6 December 2016.

It forms part of a wider shake-up of public-interest entities, compelling them to put their audits up for grabs every decade and swap auditors every 20 years, in addition to limiting the level of non-audit fees.

In response to the BIS consultation, ICAEW has said it believes the most efficient and effective approach will be to amend the existing UK strategic report requirements applicable to all quoted companies to comply with the requirements of the directive; and extend those amended strategic report requirements to other entities that while not quoted are nonetheless within the scope of the directive.

Nigel Sleigh-Johnson, head of the financial reporting faculty at the ICAEW said: “This approach requires only minimal amendments to the existing, well-understood and highly-regarded UK narrative reporting regime. Unnecessary or overly-frequent change is unhelpful for users and preparers, who prefer a strong degree of continuity and consistency in reporting.”

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