12 May 2013
On 16 April 2013 the European Commission published a proposed directive on the disclosure of non-financial and diversity information by large companies and groups.
The Commission’s page on the proposed directive is here; press release here; FAQs here; and draft directive text here.
From the FAQs:
“This proposed Directive would amend the Accounting Directives (Fourth and Seventh Accounting Directives on Annual and Consolidated Accounts, 78/660/EEC and 83/349/EEC, respectively). The objective is to increase EU companies’ transparency and performance on environmental and social matters, and, therefore, to contribute effectively to long-term economic growth and employment.
Companies concerned will be required to disclose in their annual reports relevant and material information on policies, results and risks concerning environmental aspects, social and employee-related matters, respect for human rights, anti-corruption and bribery issues, and diversity on the boards of directors.”
Posted in Companies Act 2006 and company law, Consultations, Equity capital markets, Europe, Reporting and accounts |
Comments Off
12 May 2013
Here, on 16 April 2013.
For more on the International Intergrated Reporting Council, see our previous posts here and the IIRC website here.
Posted in Lobby groups, Reporting and accounts |
Comments Off
12 May 2013
Prompted by the Netflix CEO’s post on Facebook about monthly online viewing rates. The SEC statement is here. Excerpt:
“Washington, D.C., April 2, 2013 — The Securities and Exchange Commission today issued a report that makes clear that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information.”
Posted in Equity capital markets, Financial services and market conduct, Regulators, Reporting and accounts, United States |
Comments Off
25 March 2013
On 11 March 2013 the Department of Business, Innovation and Skills published a second draft of the regulations which will implement the Government’s changes to the corporate governance framework for executive remuneration. As we discussed in this post of June 2012, the big change is to give shareholders in quoted companies a binding vote over executive remuneration.
The second draft of The Large and Medium-sized Companies and Groups (Accounts and Reports )(Amendment) Regulations 2013 is here. The BIS consultation page is here.
On 22 March 2013 BIS published a useful set of FAQs on these new regulations. Section C of those FAQs attempts to explain the implementation of the timing of the new regime.
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, Reporting and accounts, UK government |
Comments Off
25 March 2013
The Financial Reporting Council’s “Financial Reporting Lab” published on 5 March 2013 the results of its second project on reporting remuneration, “this time exploring the views of investors and companies on two new aspects of the draft reporting regulations on remuneration:
- scenario charts demonstrating how directors’ pay varies with performance, and
- a chart comparing CEO pay based on the single figure for remuneration, with company performance, measured using Total Shareholder Return”.
The Lab’s press release is here and the project report is here.
See also: A single figure for directors’ pay? FRC Financial Reporting Lab report#
Posted in Companies Act 2006 and company law, Directors, Regulators, Reporting and accounts |
Comments Off
12 March 2013
It would be easier to understand if the SFO simply explained what it thinks the possible conflict arising from its use of Autonomy software might be. From an SFO press release today (our emphasis):
“As has been widely reported, allegations have been made to the SFO about the circumstances of the sale in 2011 of Autonomy to Hewlett Packard. The Director of the Serious Fraud Office has decided to open an investigation into those allegations, with a view to using its powers of investigation to allow them to be tested. It is, of course, right to point out that the opening of a criminal investigation does not mean that individuals are guilty of a crime or indeed that a crime has been committed.
It has also been reported that the SFO uses an Autonomy product, Introspect, as a document management tool. The SFO is keen to ensure that there is now no conflict of interest, or perception of such a conflict and it is obliged as a first step to make inquiries to ensure that it can continue as the investigating body. It is undertaking this work at present.
The SFO will make no further comment whilst its investigation is underway.”
Posted in Reporting and accounts, UK government |
Comments Off
4 March 2013
Competition Commission press release, 22 February 2013:
“Competition in the audit market is restricted by factors which inhibit companies from switching auditors and by the tendency for auditors to focus on satisfying management rather than shareholder needs. This is the Competition Commission’s (CC) provisional conclusion in its market investigation into the supply of statutory audit services to large companies in the UK.
In a summary of its provisional findings published today, the CC states that because companies find it difficult to compare alternatives with their existing auditor, prefer continuity and face significant costs in switching, they are reluctant to change auditor and so lack bargaining power. Audit firms outside the ‘Big 4’, which dominate the market, find it difficult to show that they have sufficient experience and reputation to win the audit engagements of FTSE 350 companies.
Additionally, although auditors are appointed to protect the interests of shareholders, who are therefore the primary customers, too often auditors’ focus is on meeting the needs of senior management who are key decision takers on whether to retain their services. This means that competition focuses on factors that are not aligned with shareholder demand.
read more »
Posted in Equity capital markets, Regulators, Reporting and accounts |
Comments Off
11 February 2013
From a Financial Reporting Council press release today:
read more »
Posted in Regulators, Reporting and accounts |
Comments Off
11 February 2013
Following HP’s allegations of “serious accounting improprieties, misrepresentation and disclosure failures” at its recently-acquired Autonomy business (which, together with Autonomy’s founder’s rebuttal, we reported on here), the Financial Reporting Council today launched an investigation:
“into the published financial reporting of Autonomy for the period between 1 January 2009 and 30 June 2011″.
The FRC’s press release is here. Autonony was traded on the London Stock Exchange throughout the period under investigation.
Posted in Companies Act 2006 and company law, Equity capital markets, Regulators, Reporting and accounts, Takeovers |
Comments Off
8 February 2013
On 4 February 2013 the Financial Reporting Council issued a consultation paper ( accompanying press release here) proposing (in the words of the overview to the CP) to require the auditor’s report to:
read more »
Posted in Companies Act 2006 and company law, Consultations, Equity capital markets, Regulators, Reporting and accounts |
Comments Off
1 February 2013
On 30 January 2013 the Financial Reporting Council issued a consultation document on implementing the recommendations of the Sharman Inquiry on Going Concern and Liquidity Risks. The consultation document is here and the accompanying press release is here. From the press release:
read more »
Posted in Consultations, Corporate governance, Directors, Equity capital markets, Regulators, Reporting and accounts |
Comments Off
11 December 2012
Has been updated. Contains examples of engagement letters, liability caps and disclaimer notices.
“This guidance, ICAEW Technical Release TECH 10/12AAF (Audit 1/01 updated), is issued by the Audit and Assurance Faculty of ICAEW in November 2012 to assist professional accountants when asked to provide reports that have been requested by third parties. ICAEW Technical Release TECH 10/12AAF updates ICAEW Technical Release Audit 1/01, Reporting to third parties, originally issued in 2001.”
See also: ICAEW legal and regulatory technical releases
Posted in Lobby groups, Reporting and accounts, Risk management |
Comments Off
4 December 2012
Posted in Regulators, Reporting and accounts |
Comments Off
4 December 2012
…in connection with the spate of accounting misdemeanours involving Chinese companies listed on US capital markets, of which the Sino-Forest scandal has been the most high-profile. SEC press release here.
On the same day, Canada’s stock market regulator has accused Ernst & Young LLP of failing to conduct a proper audit of Sino-Forest.
See also: European Commission proposals for reform of the audit market: Big Four firms may have to separate their audit businesses
Posted in Equity capital markets, Regulators, Reporting and accounts, United States |
Comments Off
4 December 2012
Following HP’s allegations of “serious accounting improprieties, misrepresentation and disclosure failures” at its recently-acquired Autonomy business, Dr Mike Lynch – the founder of Autonomy – has set up a website to provide “relevant information pertaining to the accusations made by Hewlett Packard on 20 November 2012 of financial impropriety at Autonomy”.
(“The former management team of Autonomy strongly rejects the accusations made by HP.”)
See also: Ian Hannam – charged with market abuse by the FSA – has set up his own website.
Posted in Reporting and accounts |
Comments Off
28 November 2012
The European Private Equity and Venture Capital Association launched its “Handbook of Professional Standards” on 15 November 2012. A press release is here and the Handbook can be accessed here.
read more »
Posted in Corporate governance, Europe, Lobby groups, Private equity, Reporting and accounts |
Comments Off
29 October 2012
The Government on 18 October 2012 published the draft regulations which will effect its proposed reform of companies’ narrative reporting. We discussed the proposals in this post of September 2011 and the Government’s response to its consultation in this post of April 2012.
The draft regulations are contained in this BIS document, “The future of narrative reporting: a new structure for narrative reporting in the UK“, and the accompanying BIS press release is here. The closing date for comments on the draft regulations is 15 November 2012.
The BIS document contains this summary of the proposals:
read more »
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Reporting and accounts |
Comments Off
15 October 2012
On 15 October 2012 the Financial Reporting Council published a discussion paper ‘Thinking about financial reporting disclosures in a broader context’. The FRC press release is here and the discussion paper is here.
From the FRC press release:
“The paper aims to improve the quality of financial reporting disclosures. The paper sets out a road map for a disclosure framework for financial reporting aimed at improving the quality of disclosure and their value to the users. In particular, the paper covers the reduction of clutter in financial reports by avoiding duplication in disclosures and using tests of materiality more rigorously.”
The consultation period on the paper closes on 31 January 2013.
See also: A single figure for directors’ pay? FRC Financial Reporting Lab report
Financial reporting for the smallest businesses: Government will consult on taking advantage of the new European regime
The FRC’s Financial Reporting Lab: A pragmatic approach to improving company reporting
Financial reporting: Regulator issues reminder of the fundamental importance of “true and fair”
“Cutting clutter” from annual reports: Financial Reporting Council recommendations
Posted in Companies Act 2006 and company law, Regulators, Reporting and accounts |
Comments Off
2 October 2012
The Financial Reporting Council issued on 28 September 2012 revised auditing standards which aim “to enhance communications to audit committees and auditor reporting”. From the FRC press release:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Regulators, Reporting and accounts |
Comments Off
1 October 2012
The Financial Reporting Council confirmed on 28 September 2012 that it is going ahead with changes to the UK Corporate Governance Code and the Stewardship Code. These changes were consulted on in April 2012, as we discussed here. The changes to both Codes are ”intended to increase accountability and engagement through the investment chain”. The FRC’s press release is here.
The new version of the Governance Code is here and the new version of the Stewardship Code is here. The updated Codes apply from 1 October 2012.
The FRC has also published an updated edition of its Guidance on Audit Committees to reflect the changes to the UK Corporate Governance Code, and will carry out further consultation on whether changes are needed to those parts of the UK Corporate Governance Code dealing with remuneration when the Government’s legislation on remuneration reporting and voting has been finalised. Any changes following this consultation will be effected in the next edition of the Code.
UK Corporate Governance Code
Here is the FRC’s summary of the changes to the Governance Code:
read more »
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Equity capital markets, Regulators, Reporting and accounts |
Comments Off
7 September 2012
Posted in Reporting and accounts |
Comments Off
17 August 2012
“Can accountants save the world?” asks the Institute of Chartered Accountants in England and Wales.
Posted in Lobby groups, Reporting and accounts |
Comments Off
14 August 2012
From yesterday’s announcement by the Accountancy and Actuarial Discipline Board into PwC’s role in RSM Tenon Group plc’s accounting problems:
read more »
Posted in Regulators, Reporting and accounts |
Comments Off
17 July 2012
The Securities and Exchange Commission’s 13 July 2012 ”Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers” is here.
The Financial Reporting Council’s response expresses its disappointment at the SEC’s decision:
read more »
Posted in Reporting and accounts, United States |
Comments Off
28 June 2012
The Department of Business, Innovation and Skills today published the draft regulations that will implement the Government’s plans to reform the pay of quoted company directors. The regulations are contained in this consultation document. The accompanying BIS press releases are here and here.
read more »
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, Reporting and accounts, UK government |
Comments Off
25 June 2012
Defra announced on 20 June 2012 that it intends to require quoted companies* to report their greenhouse gas emissions in the directors’ report of their annual report, and will consult on the contents of secondary legislation to implement that policy. The announcement follows a prior consultation to decide how to proceed with the requirements of section 85 of the Climate Change Act 2008.
*See section 385 Companies Act 2006
UPDATE 25 July 2012: The Defra consultation has now been published and is here.
Posted in Companies Act 2006 and company law, Consultations, Reporting and accounts, UK government |
Comments Off
19 June 2012
The Financial Reporting Council has updated its guidance for directors of listed companies on ”Responding to heightened country and currency risk in interim financial reports”. The updated guidance, which was first published in January 2012, is here and the accompanying FRC press release is here.
The FRC summarises the purpose of this guidance as follows:
read more »
Posted in Regulators, Reporting and accounts |
Comments Off
14 June 2012
The Sharman Inquiry on “Going Concern and Liquidity Risk: Lessons for companies and auditors” published its final report and recommendations on 13 June 2012. The final report is here and the Financial Reporting Council’s accompanying press release is here.
The Inquiry was established by the FRC in March 2011, as we reported here, to “identify lessons for companies and auditors addressing going concern and liquidity risk” arising from the financial crisis. Amongst the Inquiry’s terms of reference were:
• “How companies ensure the adequacy, timeliness and reliability of the internal information used to monitor going concern and liquidity risk; and
• Whether the going concern and liquidity risk disclosures required by IFRS, the UK Corporate Governance Code and the Listing Rules provide timely and relevant information for all stakeholders.”
The Inquiry issued its interim report in November 201 (see our summary here).
Purpose of a company’s going concern assessment
read more »
Posted in Corporate governance, Financial services and market conduct, Regulators, Reporting and accounts, Risk management |
Comments Off
3 May 2012
The advisory vote on the remuneration report at today’s AGM was lost by the insurer. It seems that institutional shareholders are to some extent pre-empting the results of the Government’s consultation on giving investors binding votes on executive pay.
Manifest, the proxy voting agency, reports that “only 12 other FTSE 100 companies have had more than 40% dissent on their remuneration report since records began” and that Aviva becomes only the fourth FTSE100 company to lose the advisory vote.
The chief executive of Trinity Mirror, Sly Bailey, has seen the writing on the wall and quit a week ahead of her AGM. Ms. Bailey managed to extract £12.7 million from the company whilst overseeing a 90% fall in the share price during her tenure.
UPDATE 8 May 2012: Following the shareholder vote against the remuneration report, the Chief Executive of Aviva has now resigned with immediate effect even though he personally was re-elected by 95% of those voting at the AGM on 4 May.
He gets a year’s salary “subject to mitigation” and £300,000 “in full and final settlement of all claims that he might have to bonus under his contract”, and pension, and vesting of shares from the 2009 bonus plan – but nothing from the deferred elements of the 2010 or 2011 bonus plans. Approximately £1.7 million, all taken together.
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, Reporting and accounts |
Comments Off
20 April 2012
Here is the Financial Reporting Council press release, which highlights the principal proposed changes to the Codes and Standards and contains links to the consultation documents.
read more »
Posted in Consultations, Corporate governance, Equity capital markets, Regulators, Reporting and accounts |
Comments Off
19 April 2012
The Accountancy and Actuarial Discipline Board yesterday started a consultation on “Sanction Guidance to Tribunals“. The consultation discusses the sanctions that the independent tribunal could impose on auditors found guilty of professional misconduct by the AADB. The headline suggestion is that, for the first time, fines should be calculated by reference to an audit firm’s turnover. AADB press release here.
See also: PwC receives largest fine ever imposed on a UK accountancy firm
Posted in Consultations, Regulators, Reporting and accounts |
Comments Off
18 April 2012
A reminder of the very useful legal and regulatory technical releases of the ICAEW and available on their website, including:
- Tech 01/11 guidance for directors on accounting records under the Companies Act 2006
- Tech 02/10 and 01/09 on distributable profits
- Tech 06/08 on financial and accounting duties and responsibilities of directors.
There is also a useful financial services release on the preparation of section 166 reports and financial reporting release on the disclosure of auditor remuneration; and various audit releases (for example, access to working papers, and auditors’ duty of care to third parties).
Posted in Companies Act 2006 and company law, Directors, Financial services and market conduct, Lobby groups, Reporting and accounts |
Comments Off
17 April 2012
We have been following Healthcare Locums plc, the AIM company which turned into an accounting debacle – see “How to make your accounts look better and have to restate them” and “Healthcare Locums fiasco: US hedge funds to sue company and three former directors“.
Founder Kate Bleasdale is now taking the company to an employment tribunal, where the accounting allegations against her are being run through in detail, as the Daily Telegraph reports.
UPDATE 25 June 2012: All of Ms. Bleasdale’s claims at the employment tribunal failed
Posted in Companies Act 2006 and company law, Equity capital markets, Reporting and accounts |
Comments Off
16 April 2012
And endorses the Q&As previously issued by the CESR. Document here.
Posted in Equity capital markets, Europe, Financial services and market conduct, Regulators, Reporting and accounts |
Comments Off
16 April 2012
The regulations were required by section 85 of the Climate Change Act 2008. Defra’s report is here.
UPDATE 25 June 2012: Defra to require quoted companies to report on greenhouse gas emissions in annual report
Posted in Companies Act 2006 and company law, Reporting and accounts, UK government |
Comments Off
5 April 2012
Broad support for division of annual report into two parts: a Strategic Report and an Annual Director’s Statement
read more »
Posted in Companies Act 2006 and company law, Consultations, Reporting and accounts, UK government |
Comments Off
2 April 2012
The Auditing Practices Board on what auditors can learn from scepticism in ancient Greece, fourteenth century manor houses and the Companies Acts of the nineteenth century
read more »
Posted in Companies Act 2006 and company law, Regulators, Reporting and accounts |
Comments Off
28 March 2012
2007 Annual Report and 2008 Rights Issue prospectus of Cattles plc contained highly misleading arrears, impairment and profit figures
read more »
Posted in Directors, Equity capital markets, Financial services and market conduct, Regulators, Reporting and accounts |
Comments Off
27 March 2012
Improving the focus, efficiency and influence of the UK’s corporate governance and accounting regulator
read more »
Posted in Corporate governance, Equity capital markets, Regulators, Reporting and accounts |
Comments Off
