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FRC issues a Discussion Paper on the role of auditors and preliminary announcements

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27 Apr 2017

The Financial Reporting Council (FRC) has issued a Discussion Paper on the role of auditors and preliminary announcements.

The FRC indicates that the Discussion Paper is intended to “stimulate a discussion about ways to enhance the value of preliminary announcements and any assurance provided in respect of those announcements to the user community”.  The FRC will use feedback on the Discussion Paper to drive revisions to the auditor guidance contained in Bulletin 2008/2 The Auditor’s Association with Preliminary Announcements made in Accordance with the Requirements of the UK and Irish Listing Rules which was last updated in 2008. 

The FRC is also conducting outreach work “to understand the extent to which investors in the UK are satisfied or dissatisfied with the tone, content and style of preliminary reports and to identify if improvements could be made”. 

The Discussion Paper identifies some of the options which have been identified in the course of the FRC’s initial outreach as to how the existing guidance might best be revised and provides the opportunity to hear the views of a wider range of stakeholders.

The Discussion Paper includes:

  • a brief summary of the key legislative and regulatory requirements which relate to preliminary announcements;
  • analysis of current practice in the LSE Main Market and AIM Markets, based on a survey of c180 companies; and
  • an evaluation of the current guidance and options for change.

Comments on the Discussion Paper were requested by 23 June 2017.

*Update 24 October 2017*

The FRC published a feedback statement and impact assessment in October 2017.  Feedback suggests that stakeholders are "broadly content" with current arrangements.  The FRC will therefore only be making minor amendments to the guidance for auditors.  Updates will include - updating the material to take account of developments in the Listing Rules, corporate governance and reporting and the use of alternative performance measures.

The press release and Feedback statement and Impact Assessment  are available on the FRC website.

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