FRC Guidance for companies on Corporate Governance and Reporting

May 14, 2020

Many companies are facing unprecedented uncertainty about their immediate prospects in an environment which may challenge or disrupt their usual management and governance processes.

The FRC have issued guidance highlighting some key areas of focus for boards in maintaining strong corporate governance and provide high-level guidance on some of the most pervasive issues when preparing annual report and other corporate reporting including Interim Reports.

Interim reports

Directors will need to exercise judgment about the nature and extent of the procedures that they apply to assess the going concern assumption at the half‐yearly date.  This might include disclosures of: any material uncertainties to going concern; assumptions made about the future path of COVID-19 and the public health responses; the projected impact on business activities; use of government support measures; and access to bank and other financing. 
It is a matter for a company to decide whether to engage their auditors to perform an interim review engagement– it is not a legal or regulatory requirement.  However, feedback the FRC has received from investors indicates that such a review provides valuable assurance, and this may be particularly so in the current environment.

 

Read the full guidance here.