The FRC has published its annual end of year letter to CEOs, CFOs and audit committee chairs, outlining the body’s company reporting expectations for reports and accounts in 2020/21.
Due to Covid-19 and Brexit, the letter is “particularly significant” as companies continue to operate under the backdrop of continuous economic uncertainty.
The council’s letter explains what disclosures should be made to understand the impact of certain events on a company’s financial performance, as well as any judgements involving significant estimation uncertainty.
The FRC also outlined its expectations of companies’ climate disclosures, as well as the impact of climate change on their activities and their own environmental impact.
Sir Jon Thompson, CEO of the FRC, said: “Users of company accounts continue to expect high-quality reporting on a range of pressing issues including climate change, the UK’s EU exit and workforce engagement.
“The economic uncertainty caused by the Covid-19 pandemic has only heightened the need for companies to provide clear disclosures that allow users of accounts to properly understand a company’s position, financial performance and outlook.”
He added: “The FRC’s annual letter is designed to help companies and their auditors meet these expectations and deliver high quality reporting for all of their stakeholders.”
