Daily Insurance Industry News
 
 
Daily Insurance Industry News
Thursday 18th of October 2018
September 1, 2011

FRC proposals on risk and reporting

by Gill Montia

Story link: FRC proposals on risk and reporting

Firms that have been burying the extent of their strategic and operational risks deep in company reports, or have missed them out altogether, have come to the attention of the Financial Reporting Council (FRC).

The Council, which promotes investment by ensuring high-quality corporate governance and reporting, wants strategic risk to take its proper place in annual reports, alongside the vision for growth and profitability.

Key to this aim is better information on the work undertaken by audit committees and auditors, so that the reasoning behind decision making and judgment calls can be fully understood by investors.

The recommendations go on to tackle auditing standards, which would be amended to ensure auditors report on their review of the whole annual report, rather than solely on information that is at odds with financial statements.

The Council is also calling on companies to put their audits out to tender at least once in every ten years, and has raised concerns over the level of “boilerplate” contained in reports that are compiled largely by auditors.

In reaching its conclusions, the FRC states: “It is the company’s views that are wanted … therefore, the company, through its board of directors and management, should provide the information – not the auditors.”

Finally, the Council is keen for businesses to discard some information contained in annual reports, or publish it in a different way, such as through a company’s website.

 

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