The Financial Reporting Council (FRC) has welcomed the UK government’s publication of the draft statutory instrument on corporate reporting, which will strengthen reporting requirements.
The new requirements will introduce:
- An annual Resilience Statement, setting out how a company is managing risk and building or maintaining resilience over the short, medium, and long term.
- A triennial Audit and Assurance Policy Statement, explaining how the company proposes to assure non-financial reporting over the following three years, as well as an annual update on the implementation of the policy.
- An annual statement about distributable profits and the company’s policy on distributions.
- An annual statement on steps taken to prevent and detect material fraud.
The new rules are some way off, however. They are subject to debate and approval by both the House of Commons and Lords, and once approved will come into force from the start of 2025.
Mark Babington, FRC Executive Director of Regulatory Standards, said: “The publication of this draft statutory instrument demonstrates the government’s continued commitment to audit and corporate governance reform. These enhanced reporting requirements will strengthen transparency and accountability in business by providing key information to investors and other stakeholders.
“The new Resilience Statement, in particular, will give valuable insight into how companies are building resilience amidst current economic challenges. We at the FRC welcome these steps to boost the quality of corporate reporting and enhance the UK’s reputation for high reporting standards.”
He said the FRC is developing guidance, informed by stakeholder outreach and a public consultation, to help companies in complying with the new reporting requirements which we expect to publish before the reporting requirements come into effect.
