FRRP Concerned About Smaller Company Financial Reports
Over the last year, FRRP, the financial reporting regulator has asked three companies to restate their accounts after they failed to comply with the legal requirements of the Companies Act.
The three companies which have got the rap from FRRP are named Designcapital, Brewin Dolphin and Robin Webster.
The Financial Reporting Review Panel said that all the three companies restated their relevant numbers in the next set of financial statements.
The Financial Review Panel made this revelation when it published its review of accounts for the year to March 31, 2010.
The Financial Review Panel is a part of the Financial Reporting Council.
The panel has said that it was concerned about the quality of accounts and reports of some of the smaller listed and AIM quoted companies.
The panel further said that these smaller companies did not have the same level of reporting expertise as their larger listed counterparts. It also said that the larger companies relied a lot on their advisers for financial reporting and rarely did any of the work by themselves.
The panel studied 308 sets of accounts. Out of this, 146 were approached for further explanation or information.
The FRRP has said that there was a ‘clear improvement’ in the descriptions companies were found to have given on significant accounting policies by their management. It also said that the reports highlighted those areas which were the most affected by the senior management’s judgement.
The panel made requests for further information be provided to explain the inconsistencies between the audited accounts and the narrative information.
Bill Knight, who is FRRP chairman, said that the board calls for “reports and accounts to tell a coherent story, with an eye to the future as well as the past.’”