PracticeAuditFRC outlines reporting issues in taxing climate

FRC outlines reporting issues in taxing climate

Report identifies areas company directors should focus on in reporting accounts

The Financial Reporting Review Panel has released a report which details
potential reporting issues for companies amid an increasingly difficult economic
climate.

The report is based on findings from the assessment of 300 company accounts;
138 of which were contacted by the Panel who sought further information or
explanation on various accounting items.

In response to global market conditions, the Panel has also advised company
directors to be mindful of subsequent changes in accounting

Sources of uncertainty affecting management’s estimates, revenue recognition
criteria and relationships with special purpose entities have been highlighted
as areas to note.

Bill Knight, chairman of the Panel, said UK company directors are known for
their compliance with accounting standards, and the report has been designed to
address areas more sensitive to change.

‘The Panel is less likely to question directors whose business model is
clear, who avoid boiler-plate descriptions and who are open and direct about the
specific risks and uncertainties that may challenge their business in the
foreseeable future,’ he said.

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