Corporate reporting – FRC publishes annual review of corporate reporting

The Financial Reporting Council (FRC) has published its annual review of corporate reporting, setting out the findings of its corporate reporting review (CRR) team on the 2023/2024 reporting season. The review also highlights the FRC’s expectations for the next reporting season.

The CCR team reviewed reporting by 243 companies in this monitoring cycle and raised substantive queries with 115 companies. The 47% query or “write-rate” is higher than it was in the previous monitoring period and the rate is higher amongst non-FTSE 350 companies (28% for FTSE 350; 61% for non-FTSE 350). The review notes that whilst the quality of reporting amongst the FTSE 350 has been maintained, there is evidence to suggest a widening gap between reporting by FTSE 350 companies and other companies.

The review sets out:

• the top ten most common issues on which the CCR asked companies substantive questions during the monitoring cycle. The most common issue in this monitoring cycle was the impairment of assets (as it was in the 2022/2023 monitoring cycle) and climate-related reporting issues appear in the top ten most common issues for the first time;
• examples of how these issues presented themselves in the financial statements reviewed;
• the steps companies should take to avoid these issues; and
• where further guidance is available.

The review also includes the findings of the CCR team’s focus on the retail sector, which has been a priority sector for the FRC for the last six review cycles.

Looking forward, the review notes that the FRC will be publishing a thematic review of climate-related disclosures over the winter.