The Financial Reporting Review Panel, part of the Financial Reporting Council’s (FRC) review activity in 2011/12, will focus on the following sectors:
- Commercial property.
- Support services.
The panel will have a particular interest in companies which operate in niche markets or which are outside the FTSE 350 because they are seen to be facing more risks in the current economic climate than larger, more diversified companies. In looking at companies which provide support services the panel will focus on those with significant exposure to public spending cuts.
Reports and accounts will continue to be selected from across the full range of companies within the panel’s remit, including large private companies, and will also be selected for review on the basis of company specific factors and complaints.
Panel letters to companies increasingly include questions about the business review and in particular about the identification and description of principal risks and uncertainties. The panel challenges companies whose disclosures are boiler-plate or take the form of a long list of generic risks. It considers whether the risks identified are the principal risks and whether descriptions are sufficiently specific to enable a shareholder to appreciate the threat to the company.
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