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 complaint falls within the Conduct Committee’s scope as set out in the Operating Procedures. Details for contacting us in respect of corporate reporting review matters are set out on the FRC’s contact page. It is important to set out your complaint clearly, referring, where possible, to a specific breach of accounting or reporting rules.
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.
We cannot give out information while a case is ongoing but will write to you when it is completed. If the review results in a public announcement, you will be sent a copy of the press notice.
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 Conduct Committee’s corporate reporting review remit or the complaint itself may not fall within the Conduct Committee’s scope as set out in its Operating Procedures. Where appropriate, if a case does not fall within the Conduct Committee’s remit, we may direct you to another authority.
What type of financial information is within the scope of the Conduct Committee?
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 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.
What sort of issues does the Conduct Committee deal with?
Possible breaches of accounting rules or failure to make disclosures required by the Companies Act or accounting standards.
AIM quoted companies registered overseas are not in scope.
What does the FRC do when it receives a complaint?
The complaint is reviewed by staff in the corporate reporting review team. 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 Conduct Committee’s 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, the Conduct Committee or the FRRP 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. If a press notice is issued, you will be sent a copy.
What is a Review Group?
A Review Group is established when the CRRC decides that there may have been a potentially significant breach of accounting or reporting requirements that has not been able to be resolved through an interaction with CRR. This will usually be after several rounds of correspondence with a company, although, in exceptional circumstances, a Review Group may be established on initial review of a complaint.
A Review Group comprises the FRRP Chairman, one of the Deputy Chairmen and at least three ordinary members.
The underlying principle is that decisions taken by Boards in respect of their reports and accounts are considered by their peers. This helps to ensure that our approach takes note of business considerations and is sensible and practical.
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. Full details of the procedure are set out under Procedure for complaints about the FRC on this website.
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 a number of cases, the company agrees to improve its disclosures or accounting in the future. We only issue a press notice where a significant correction to published accounts is being made or where there is a case that we consider otherwise merits publicity.
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.
Who are the members of the FRRP? Are they qualified? Are they paid?
A full list of current FRRP members can be found at FRRP Members. FRRP members are qualified accountants or lawyers who specialise in company law and who hold, or have held, senior positions in their chosen field. They may be, or may have been, in practice, in the public sector or in industry, for example as a senior partner in a major accounting firm or as Finance Director. They are recruited by public advertisement. Other than the Chairman and Deputy Chairmen, who sit on the CRRC, they are unpaid.