CRR Reviews of Corporate Reporting

Company Names Published in June 2018

We have provided answers to a number of frequently asked questions below:

Why have you started publishing the names of companies that you have reviewed?

In 2017, the FRC’s Conduct Committee changed its Operating Procedures¹ to enable it to publish the names of companies whose report and accounts it had reviewed. It consulted publicly on the proposed change. The revised Operating Procedures reflect feedback that investors wanted additional transparency of CRR’s activities. The change applies to companies reviewed as part of CRR’s 2017/18 reporting cycle. Names are published once the company has published its next report and accounts and has had the opportunity to describe the interaction with the FRC in its own words.

Where can I find more information about the outcome of CRR’s reviews?

The list indicates whether CRR entered into correspondence with the company on corporate reporting matters. Further details of the nature of any correspondence may be obtained from the company. The FRC will not provide any further information about specific reviews. Companies applying the Guidance on Audit Committees² (April 2016) for companies complying with the UK Corporate Governance Code, should disclose the nature and extent of interaction (if any) with the FRC’s Corporate Reporting Review team³.

What does ‘substantive questioning’ refer to – does this mean that the FRC had concerns about the company’s reporting?

CRR may write to a company if it appears that there is, or may be, a question whether there is a breach of the relevant accounting and reporting requirements. However, questions may be answered satisfactorily by the company without making significant changes to its corporate reporting.

The FRC also writes to companies when it has performed a review but it has not identified any questions. These companies are separately identified on our list.

Where can I find out information about reviews currently in progress?

The FRC does not usually comment on reviews currently in progress. Paragraph 63 of the Conduct Committee’s Operating Procedures explains that ‘neither FRC staff, the CRR Committee, a Review Group nor the Conduct Committee will respond to a request to confirm or deny whether a specific review is being undertaken. However, where the Conduct Committee decides that it is in the public interest to do so, it may make an announcement that a review into a company’s Report(s) is being carried out. If, following completion of the review, no further action is to be taken, a further press announcement to that effect will also be made if it is appropriate in the circumstances to do so.’

Can I tell whether a matter has been referred to the FRC’s Enforcement division?

No. CRR shares information with other parts of the FRC when it is permitted to and it is relevant to their work. However, it is not possible to tell from a CRR case closure whether or not the matter has been referred to the Enforcement Division.

Decisions about whether to open an Enforcement investigation are made by the FRC’s Conduct Committee, not by CRR. The Conduct Committee is also responsible for deciding whether or not to announce the opening of an Enforcement investigation, in accordance with the FRC Publication Policies (published in February 2018)⁴.

¹ Conduct Committee Operating Procedures (PDF)

² Guidance on Audit Committees (PDF)

³ Paragraph 81

⁴ Publications Policy (Audit Enforcement Procedure) (PDF)

⁴ Publication Policy regarding decisions under the Accountancy and Actuarial Schemes (PDF)