Complaints about a company’s accounts
4 minute read
Find out about our processes and how to make a complaint about a company’s accounts.
To support effective consideration of complaints, it is your responsibility to review all submissions carefully to ensure accuracy and clarity. This is particularly important where automated or AI-assisted tools have been used, as the FRC has identified accuracy issues in some unchecked submissions.
Complaints will be handled fairly but proportionately. The FRC will not provide point-by-point responses and will limit any evidence gathering to what it reasonably considers relevant.
How can I complain about a company’s accounts?
You should complain to the company first.
If you are not satisfied with its response you can fill in our complaint form.
What reports and accounts are within the FRC remit?
Our remit relating to corporate reporting covers the annual report and accounts and interim reports of companies included on the Financial Conduct Authority’s (FCA) Official List, and the annual reports and accounts of UK-incorporated public companies (including those listed on AIM), large private companies (as defined under the Companies Act 2006), and Limited Liability Partnerships (LLPs). We do not have responsibility for other reports and accounts.
We normally focus on the most recent report and accounts since those will be the ones more relevant for users.
What matters are within the FRC remit?
We can make enquiries where it appears that the relevant statutory reporting requirements have not been followed. This is primarily where it appears that there is, or may be, a question as to whether the directors’ report, strategic report or accounts comply with the requirements of the Companies Act 2006.
We will consider whether the potential breach is material – i.e. whether it could reasonably be expected to influence the decisions of primary users. These matters are inherently judgemental.
We sometimes receive complaints about an issue that clearly has a personal impact on the complainant, for example perhaps involving an employee dispute or a local planning application and is therefore clearly serious from their perspective. However, we will not pursue the matter if it cannot also be reasonably expected to influence the decisions of primary users of reports and accounts.
We do not have formal powers over the corporate governance statement and the directors’ remuneration report. However, we may occasionally still pursue disclosure errors and omissions within these statements where there is a clear breach of reporting requirements. We would restrict any work to the disclosures within these other statements. The form and substance of the corporate governance arrangements and remuneration policies themselves are a matter for the company and its shareholders and these arrangements and are not within our remit.
We conduct reviews and enquiries under the FRC Corporate Reporting Review Operating Procedures.
What information should I provide?
The complaint form will outline what information is required, which includes the full company name and the date of the relevant report and accounts.
It is also important to clearly explain the reporting deficiency. We are more likely to be able to pursue matters when there is a clear explanation of the potential breach of reporting requirements with supporting evidence.
What will the FRC not do?
We do not give advice on the application of accounting standards or statutory reporting requirements.
Some complaints relate to an underlying dispute or grievance that may also have financial reporting implications. In these cases, we will consider whether we are the most appropriate body to pursue the complaint and, if applicable, the timing of our review.
For example, we sometimes receive complaints from employees related to employment grievances and from leaseholders disputing service charges. These types of claims may potentially have financial reporting implications (requiring provisions and/or disclosure in the accounts). With such employment or contractual disputes, we normally allow the relevant legal process (through tribunals or the courts) to conclude before assessing whether there is a financial reporting issue for us to consider, unless there is clearly a much broader public interest in the matter.
In other cases, we may refer the complainant to another organisation better placed to deal with the complaint, such as the Financial Conduct Authority or the Serious Fraud Office.
What action can the FRC take?
- Ask directors to explain apparent departures from reporting requirements.
- Ask directors to amend the accounting treatment or disclosures in future reports and accounts or to voluntarily withdraw and issue revised reports and accounts
- We have statutory power to apply to the Court if restatements are not made or we remain dissatisfied.
What and when will I hear back from the FRC?
After the initial acknowledgment of your complaint, we will contact you within 5 working days to tell you if your complaint cannot be reviewed by the FRC.
If it is something we can potentially look into, it will be passed to our Corporate Reporting Review (CRR) Team to consider, and we will inform you of this within 5 working days.
If the CRR Team decide not to take further action, e.g. they do not consider the matter falls within the FRC’s area of responsibility or does not require further consideration, we will aim to do so within 6 weeks. If we consider that your complaint should be referred instead to another regulator or body, we will tell you.
If your matter remains under consideration by our CRR Team, we may contact you for further information but we will not provide you with substantive updates. If you write to us asking for updates we will not be able to give you any further information. This is because our CRR Team have to conduct their review of matters under the FRC Corporate Reporting Review Operating Procedures, which commit to treating company information on a statutory and confidential basis, and with due and fair process for a company to respond to and engage with us to explain its accounting treatment.
We will write to you at the end of the process to tell you the outcome. However, the process and the complexity of some of the accounting issues may mean that it takes longer than you may immediately expect for a corporate reporting review to be concluded. The FRC Corporate Reporting Review Operating Procedures also reflect statutory restrictions on what we can tell you (or others) about the progress or outcome of our review.
In particular, if the outcome of our review is that the company agrees to correct comparative figures in its next set of annual financial statements (or next interim report), we may not be able to disclose this to you until the company has published those figures. Because of annual reporting cycles, this sometimes means complainants do not find out the outcome of their complaint for up to, or around, 18 months after raising the matter.
You can subscribe for news updates from the FRC (this will include press notices about our CRR Reviews).
We also publish information about our CRR activity in our Annual Activity Reports and thematic reviews.
What if I disagree with how the FRC has handled my complaint?
You can fill in our complaint form.
See more about how we handle these complaints and what happens next