The Financial Reporting Council has published its Annual Report 2015 on corporate reporting. The report is generally positive and notes that boards generally responded well to the new strategic report requirements (formerly the business review requirement). However, the report also highlights some concerns, notably about how boards assess materiality when deciding whether, and, if so, how they should correct identified errors.
The report also notes that amongst smaller listed and AIM quoted companies there was a higher element of simply applying IFRS incorrectly and not providing sufficient disclosure. Clear and concise reporting is key to investor understanding and the report notes that irrelevant accounting policy disclosures distract from understanding and should be avoided.
