Regulators remind auditors to pay attention to Covid measures on corporate reporting

The FCA and the FRC have issued a joint statement to remind auditors of the coronavirus-led rule changes around corporate reporting for listed companies.

Now is the busiest time for auditors, when, under normal circumstances, many listed companies would publish their end of year results.

But 2021 is proving especially challenging for auditors, with England’s third national lockdown getting in the way of auditors being able to practically complete audits.

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Today the Financial Reporting Council (FRC) and the Financial Conduct Authority (FCA) issued a joint statement to remind auditors to make use of the new measures the regulators put in place to help auditors through the pandemic.

The measures include an extension of the typical reporting period. Under normal circumstances listed companies have four months from the financial year end date to publish their annual financial reports. This has been extended to six months.

An additional month has also been added for companies to publish half yearly financial reports, meaning companies have four months, rather than three, to publish half year results.

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FRC executive director of regulatory standards Mark Babington said: “As the busiest period of the year for the preparation and audit of financial accounts approaches, it is paramount that investors and users of financial information continue to receive high quality financial information.   

“Companies, auditors and investors should familiarise themselves with the latest guidance during these uncertain times to ensure they are managing reporting frameworks and stakeholder expectations appropriately.” 

Last week Mazars global head of audit David Herbinet told City A.M. it was proving particularly difficult to audit companies with inventory.

As part of an audit of a company with inventory, an auditor must carry out a stock-take.

He explained that because of the latest coronavirus restrictions, many companies were not letting auditors do the necessary work to count the inventory.

He said if the national lockdown continues to mid-March without any restrictions easting, things could get “really, really tricky”.

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