Audit

FRC issues advice on coronavirus risk disclosures​

The Financial Reporting Council (FRC) has today published guidance for companies on disclosure of risks and other reporting consequences arising from the emergence and spread of Coronavirus.

The regulator said it is also discussing with audit firms whether the virus affects its abilities to review component audits in China and the consequences to delivering timely audit opinions.

FRC added that, by law, companies are required to disclose principal risks to their business. The FRC is advising companies to “carefully consider” what disclosures might need to be included in year-end accounts, which it said will be “particularly relevant” for companies either operating in or having close trading associations with China. 

The FRC noted that depending on the extent to which the virus spreads outside of China, other companies could also “become affected”. The regulator is also in discussions with audit firms to assess the impact on audits of UK listed groups with Chinese subsidiaries.

A spokesperson for the FRC said: “Given the potential for rapid spreading of the virus, required disclosures will likely change over time as more information about the epidemic emerges.

“Companies will need to monitor developments and ensure they are providing up-to-date and meaningful disclosures to their shareholders when preparing their year-end reports.”

A link to the guidance can be viewed here.                                           

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