by Jason Gorringe, Tax-News.com, London
21 May 2019
A new guide designed to help smaller listed and Alternative Investment Market (AIM) quoted companies improve their financial reporting has been published by the Institute of Chartered Accountants in England and Wales (ICAEW) and the Financial Reporting Council (FRC).
Addressing issues raised by the FRC about the quality of financial reporting for these companies, the guide provides practical tips and questions for audit committees to consider, with a view to improving smaller quoted company reporting.
“High quality financial reporting can contribute to a strong and efficient economy by increasing transparency and enabling investors to assess the financial integrity of a company and hold management to account. However, for many smaller listed and AIM quoted companies, financial reporting is not always seen as a top-tier issue,” the ICAEW said.
The new publication, Smaller Listed and AIM Quoted Companies – A Practical Guide for Audit Committees on Improving Financial Reporting, offers practical, cost-effective suggestions on how smaller quoted companies can better their financial reporting and suggested questions for audit committees to ask themselves and those associated with the financial reporting process, including the board, chief financial officer, finance team and external auditors. These questions are designed to encourage smaller quoted companies to reflect on current practices and consider areas for improvement.
Paul George, the FRC’s executive director of corporate governance and reporting, said: “Smaller quoted companies are critical to generating future jobs and growth in the economy and need access to capital to invest and grow. The availability of capital though can be affected by the quality of reporting, so audit committees have a vital role to play in ensuring that the quality of reporting meets the needs of stakeholders and those companies’ growth aspirations.”