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The Financial Reporting Council has published new guidance aimed at helping smaller listed companies improve the quality of their corporate reporting and use their resources more effectively.
The thematic review examined the annual reports of 20 companies listed outside the FTSE 350 on both the Main Market and AIM.
It focused on four areas that draw close investor scrutiny and have frequently prompted questions from the regulator: revenue recognition, cash flow statements, impairment of non-financial assets and financial instruments.
The FRC stated that improvements in these areas depend on clearer, company-specific accounting policies; accurate and consistent classification in cash flow statements; more transparent disclosure of assumptions and sensitivities used in impairment assessments; and tailored policies and risk disclosures for financial instruments.
The report outlines common triggers for FRC enquiries and includes illustrative examples, based on real casework, showing the difference between informative and less effective disclosures.
The regulator said the findings are intended to support smaller listed companies in strengthening their reporting, while also helping auditors understand the review team’s focus areas.
Audit committees and investors are expected to use the insights to improve their oversight and challenge of company disclosures.
