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The Financial Reporting Council (FRC) today announces the following matters in relation to Quindell Plc (the company):
The Committee first wrote to the company on 20 March 2014 with regard to the 2012 report and accounts and extended the scope of its work on 30 September 2014 into certain aspects of the 2011 report and accounts.
The principal issues raised by the Committee were the timing and amount of revenue recognised for claims management and related services, the acquisition of Quindell Limited by Mission Capital plc and the accounting for certain acquisitions and related transactions with TMC (Southern) Limited (“TMC”).
The company has today published its annual report and accounts for the year ended 31 December 2014. These contain substantial restatements of prior year revenues, profits and net assets, including corrections and adjustments in response to the issues raised by the Committee. In this respect, note 3 to the company’s accounts explains that the company has:
The FRC notes that, in the light of market concerns and certain of the Committee’s questions, the company reviewed certain other aspects of its financial reporting for the periods prior to 31 December 2013 which resulted in additional adjustments that are also reflected in the annual report and accounts published today.
The effect of all the restatements has been to turn the 2013 profit after tax of £83 million to a loss of £68 million and reduce reported net assets from £668 million to £446 million at 31 December 2013.
The Committee notes that the directors and auditor have reported that it has not been possible, so far, for them to determine that all material errors and omissions arising from historic transactions have been identified. The directors have provided the Committee with an undertaking to keep it informed and make such corrections as may be necessary.
In light of the positive actions taken by the directors in correcting the identified errors, amending accounting policies and providing their undertakings, the Committee is closing its review of the 2011 and 2012 report and accounts.
We will report as appropriate in due course on the outcome of the investigation under the Accountancy Scheme referred to in the opening paragraph.
Notes to editors: