Accountants Corporate Reporting Review FAQs FAQs: Making a complaint about a company’s accounts

FAQs: Making a complaint about a company’s accounts

Do I need to be a shareholder in a company in order to make a complaint?

No. Anyone can make a complaint about the report and accounts of a company or other entity within the Conduct Committee’s scope for corporate reporting.

We also act in response to anonymous complaints. However, unless there is a public announcement at the closure of the case, this means that you may not know how the matter has been addressed.

How do I make a complaint about a set of accounts?

First, you should check that the entity and the nature of the complaint falls within the scope as set out in the FRC Corporate Reporting Review Operating Procedures. The ‘Complaints’ section of the FRC’s website provides information about the entities and types of complaints we can review, our processes for doing so and includes the online form to submit your complaint or referral. It is important to set out your complaint clearly, referring, where possible, to a specific breach of accounting or reporting rules.

I have a complaint about a company that is not a public or large private company. Who should I contact?


The FRC has agreed with the Department for Business, Energy & Industrial Strategy that complaints about companies that do not meet the size criteria set out in paragraph 11 of the FRC Corporate Reporting Review Operating Procedures should be sent to Companies House (enquiries@companieshouse.gov.uk).
 
It is important to note that Companies House is a registry, not a regulator. However, Companies House can write to any company if it is made aware that the accounts, or any of the reports contained within the annual report, are missing or incomplete.
 
When making a complaint to Companies House it would be helpful to provide specific instances of apparently missing or incomplete information in the annual report and accounts. Where it is apparent from the accounts themselves that an accounting standard has been incorrectly applied, it would be helpful to explain this and to refer to the relevant accounting standard.
 
Follow up action of a more substantial nature would be for the Department for Business, Energy & Industrial Strategy, which is able to prompt further action if the company has not addressed a matter of particular concern. The Department can be contacted at enquiries@beis.gov.uk.

Can I speak to someone in the corporate reporting review team?

You can call to check if a matter is likely to fall within the Conduct Committee’s remit, but a written explanation of your concern is more likely to avoid misunderstanding.

I have been told that my complaint is not being pursued. Why might that be?

There are a number of reasons why this might be the case. The entity that is the subject of the complaint may not fall within the FRC’s corporate reporting review remit or the complaint itself may not fall within the scope as set out in the FRC Corporate Reporting Review Operating Procedures. Where appropriate, if a complaint does not fall within the FRC’s remit, we may direct you to another authority.

What type of financial information is within the scope of the FRC?

The financial accounts, directors’ and strategic reports of UK public companies, large private companies, limited liability partnerships and certain overseas companies listed on the UK Main Market are all within scope. This includes interim and annual accounts, but not press releases, trading statements or other financial reports that a company may publish from time to time.
 
AIM quoted companies registered overseas are not in scope; nor are the interim accounts of UK registered companies quoted on AIM.

What sort of corporate reporting issues does the FRC deal with?

Possible breaches of accounting rules or failure to make disclosures required by the Companies Act or accounting standards.

What does the corporate reporting review team do when it receives a complaint?

The complaint is reviewed by staff in the corporate reporting review team to determine whether the entity and matter are within the FRC’s remit. If there is, or may be, a question of whether a report complies with relevant accounting or reporting requirements, the CRR Director will write to the company Chairman seeking further information and explanations. In the course of our review, we may find other issues which we may wish to raise with the company. 

Will my identity be revealed to the company?

We operate confidentially as set out in the FRC Corporate Reporting Review Operating Procedures. We do not normally disclose how a matter at issue came to our attention, nor do we reveal the identity of any complainant. An exception to this is where a complainant gives express permission to notify the company of their complaint.  If we become aware that a complainant has made his complaint public, we will draw that to the attention of the company.

 In addition, the FRC is a Prescribed Person under the Public Interest Disclosure Act 1998, which provides additional protection for complainants in some circumstances.

Can I speak to members of the corporate reporting review team or the FRC’s central complaints team about the progress of my complaint?

In order to maintain confidentiality, we are not be able to discuss a case that is in progress, even with the complainant.

If we need further information from you, we will contact you to ask for further information or clarification. We prefer communication to be in writing in order to preserve a proper audit trail and to avoid any misunderstanding. 

Will I be informed of the outcome of my complaint?

We will not discuss your complaint while the review is ongoing. We will, however, inform you of the outcome of our review to the extent possible, given our confidentiality obligations. We also periodically publish, with the consent of the relevant company, a summary of findings following the closure of a review. These identify whether the company agreed to make a change to a significant aspect of its reporting in response to CRR’s review. It also identifies other, less significant, outcomes from the review where CRR believes readers of the findings would benefit from understanding more about the enhancements companies have made to their reports and accounts as a result of the review.

The FRC has written to say that it is satisfied with the company's response to its enquiries and does not intend to take any further action. I am not happy about this as I still think the company's accounts are wrong. What can I do?

We will explain to you, as far as we are able given confidentiality restrictions, why we have decided to take no further action but will not enter into any further discussion about our decision. Your complaint will have been carefully considered. If we think that it might be appropriate for you to contact any other regulatory authority, we will tell you.
 
The FRC has a complaints procedure for anyone who comes into contact with a part of the FRC and who is unhappy or dissatisfied about the way that part has exercised or failed to exercise its functions.

CRR says that it looks at hundreds of cases each year. Why are so few press notices issued about its findings?

We select accounts for review in a number of ways (see "How we review reports and accounts”). In some cases, no question of potential substance arises from a review of the published accounts. In others, questions are resolved by explanation from the company. In most cases, the company agrees to improve its disclosures or accounting in the future. We only issue a press notice on those rare occasions where a highly significant correction to published accounts is being made or where there is a case that we consider otherwise merits publicity.
 
We do also periodically publish, with the consent of the relevant company, a summary of findings following the closure of a review. These identify whether the company agreed to make a change to a significant aspect of its reporting in response to CRR’s review. It also identifies other, less significant, outcomes from the review where CRR believes readers of the findings would benefit from understanding more about the enhancements companies have made to their reports and accounts as a result of the review.

What will happen to the company if my complaint is upheld?

The Conduct Committee’s powers are restricted to seeking the correction of defective accounts. In many cases, we accept corrective action by a company without the issue of a press notice. We may, however, issue a press notice setting out our conclusions on a case, the reasons for those conclusions, and the corrective action that has been agreed with the company. Where appropriate, we refer our findings to other relevant bodies, such as the FCA or a professional body.