This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

FRC announces thematic review and priority sectors for 2022/23

  • FRC Image

07 Dec 2021

The Financial Reporting Council (FRC) has announced its corporate reporting and audit quality review programme for 2022/23 alongside its priority sectors for review.

The FRC’s Supervision Corporate Reporting Review team will supplement its routine reviews of corporate reporting with six thematic reviews: 

  • Task Force on Climate-related Financial Disclosure (TCFD) Reporting and Climate-related Reporting in Financial StatementsIn collaboration with the Financial Conduct Authority (FCA), the FRC will perform a thematic review of TCFD disclosures provided by premium listed companies in response to the new Listing Rule, and of the extent to which the financial statements reflect the impact of climate change. 
  • Business Combinations (IFRS 3) - Issues relating to compliance with this standard have featured in the FRC’s ‘top ten’ findings for several years.  The FRC will undertake a general thematic review of accounting issues under this standard and identify examples of better practice
  • Earnings per Share (EPS) (IAS 33)While identification of issues related to this standard have been less frequent than the issues identified in the FRC's top 10, miscalculations of EPS can result in material errors on the face of the income statement.  The FRC will focus on those areas where it has previously identified errors.
  • Deferred Tax (IAS 12)There will be a particular focus on disclosures around deferred tax assets and whether the evidence supporting the recognition of deferred tax assets for losses is sufficiently robust
  • Discount RatesThe FRC's review will provide an overview of the requirements of IFRS Standards  in respect of discount rates and will highlight some of the difficulties companies encounter in determining appropriate discount rates to apply in the measurement of assets and liabilities.
  • Judgements and EstimatesThis has been an area of focus for the FRC in prior years. The FRC will specifically look at (i) disclosures around sensitivities and ranges of outcomes and (ii) disclosures involving judgements and assumptions made in estimating mineral reserves.

The FRC's Supervision programme of audit quality inspections will pay particular attention to the auditor’s work in the following areas:

  • Climate-related risks
  • Fraud risks
  • Cash and cash flow statements
  • Provisions and contingent liabilities
  • Impairment of assets
  • Revenue
  • Group audits

In selecting corporate reports and audits for review, the FRC will give priority to travel, hospitality and leisure, retail, construction and materials and gas, water and multi-utilities. 

A press release is available on the FRC website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.