Joint statement from FRC and FCA for companies, auditors and users of financial statements
By Anne Adrain, Head of Sustainability and Reporting
29 January 2021
We highlight a recent joint statement from the FRC and FCA on the company reporting measures that are still available during the latest lockdown restrictions
In March 2020, the Financial Reporting Council (FRC), the FCA and the Prudential Regulation Authority (PRA) made a joint statement addressing the unprecedented circumstances as a result of the COVID-19 pandemic to ensure that information continued to flow to investors and the capital markets.
In an updated announcement on 27 January 2021, the FRC and the FCA emphasise that the measures introduced in March 2020 remain in place and continue to allow some flexibility in company reporting.
These measures include an additional two months for listed companies to publish their annual audited financial statements. This time of the year represents the busiest period for the preparation, audit and publication of financial information. The joint statement recognises this fact and the challenges many companies may be facing during this new period of national lockdown.
The FCA and FRC are encouraging stakeholders to re-familiarise themselves with the measures and to use them to ensure the quality of reporting is not compromised during this period.
The FRC has issued a variety of resources to support high-quality reporting and disclosure of the situations that companies have faced as a consequence of the pandemic, and the mitigating actions they have taken to address identified risks.
Audit committees may consider it appropriate to set out in their annual report the work they have undertaken, and the measures they have agreed to ensure high-quality reporting and audit for the period affected. Further guidance was included in the FRC’s year-end letter to CEOs, CFOs and Audit Committee Chairs.
The FCA and FRC remind audit firms of their regulatory obligations to report, to the appropriate regulator, matters arising from their work on a timely basis. The FCA’s Dear CEO letter published in August 2020, and the FRC’s ISA (UK) 250 Section B - The auditor’s statutory right and duty to report to regulators of public interest entities and regulators of other entities in the financial sector, provide further guidance.