The Financial Reporting Review Panel announces priority sectors for 2012/13
News types: Corporate Reports, Generic Announcement
Published: 9 December 2011
FRRP PN 134
The Financial Reporting Review Panel today announced that its review activity in 2012/13 will focus on the following sectors:
- Commercial property
- Retail
- Support services
Reports and accounts will continue to be selected from across the full range of companies within the Panel’s remit, including large private companies, and may be selected for review on the basis of company specific factors.
The Panel will pay particular attention to the reports and accounts of companies whose shareholders have raised concerns about governance or where there have been specific complaints. It will continue to liaise with the FSA, particularly in relation to financial service companies including banks.
The Panel will focus on disclosures relating to the reporting of risks, including principal risks and uncertainties and risks arising from financial instruments. In the current uncertain economic climate, the degree of estimation in accounts may increase. It will be important that the appropriate disclosures of judgements and key assumptions underpinning estimates and sensitivities around them are included and the Panel will be giving this area its attention. The Panel will continue to review the application of IFRS 3 (Revised) to business combinations.
The Panel will consider whether business reviews are fair, balanced and comprehensive which means that they cover both good and bad news during the period.
Bill Knight, Chairman of the Panel said:
The Panel will pay particular attention to the reports and accounts of companies whose shareholders have raised concerns about governance or where there have been specific complaints. It will continue to liaise with the FSA, particularly in relation to financial service companies including banks.
The Panel will focus on disclosures relating to the reporting of risks, including principal risks and uncertainties and risks arising from financial instruments. In the current uncertain economic climate, the degree of estimation in accounts may increase. It will be important that the appropriate disclosures of judgements and key assumptions underpinning estimates and sensitivities around them are included and the Panel will be giving this area its attention. The Panel will continue to review the application of IFRS 3 (Revised) to business combinations.
The Panel will consider whether business reviews are fair, balanced and comprehensive which means that they cover both good and bad news during the period.
Bill Knight, Chairman of the Panel said:
“Directors are facing significant challenges in managing risks and in arriving at estimates for their accounts. Transparency is vital. If risks and uncertainties can be clearly explained, much will have been achieved”.
Notes to Editors
- The FRC is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
- The role of the Panel is to examine the annual accounts and directors’ reports of public and large private companies to see whether they comply with the requirements of the Companies Act 2006 including applicable accounting standards. Following implementation of the Accounting Regulation (EC) No 1606/2002, this may mean compliance with UK or International Financial Reporting Standards.
- Where breaches of the Act are discovered the Panel seeks to take corrective action that is proportionate to the nature and effect of the defects, taking account of market and user needs. Where a company’s accounts or directors’ report are defective in a material respect the Panel will, wherever possible, try to secure their revision by voluntary means, but if this approach fails the Panel is empowered to make an application to the court under section 456 of the Act for an order for revision. To date no court applications have been made.
- The Chairman of the Panel is Bill Knight and the Deputy Chairs are David Lindsell and Joanna Osborne. There are currently 35 other Panel members drawn from a broad spectrum of commerce and the professions. Individual cases are normally dealt with by specially constituted Groups of 5 or more members.
Document created under a former FRC operating body.