PracticeAuditFewer auditors’ warnings issued to the biggest plcs

Fewer auditors' warnings issued to the biggest plcs

Only two FTSE 350 companies issued with emphasis of matter statement in their accounts by auditors

Far fewer statements have been issued by auditors noting problems against the
UK’s largest public businesses than anticipated, according to separate research
by PricewaterhouseCoopers and Ernst & Young.

Only two companies in the FTSE 250 and none in the FTSE 100 have had notes
included in audit reports, also known as ’emphasis of matter’ paragraphs,
flagging up issues for the business, reported the FT.

Emphaisis of matter paragraphs flag up an issue with the business, while
‘going concern’ statements are issued by auditors who think the business might
not survive beyond the next financial year.

‘There are fewer than the industry expected and certainly fewer than I did,’
said PwC audit partner Andrew Ratcliffe.

Auditors said the lack of warning statements suggested that business’
managers were testing their assumptions of their business more robustly than
ever.

‘There has been a lot more contingency planning this year and it has
generally been business, not compliance, led,’ said PwC audit director Geoff
Swales.

John Flaherty, audit partner at Ernst & Young, warned that there were
still many filings to be made and problems could still arise.

‘There is still a lot of financial stress on companies and the true state of
UK plc will only become clear towards the end of the year,’ said Flaherty.

Further reading:

E&Y asks China staff to take
low-pay leave

Read
the FT’s story

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