UNITED KINGDOM: Joint statement by the FCA, FRC and PRA

Thursday March 26 2020

The Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) announced a series of actions to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets. This includes:

1. A statement today by the FCA allowing listed companies an extra 2 months to publish their audited annual financial reports.
2. Guidance from the FRC(link is external) for companies preparing financial statements in the current uncertain environment. This is complemented by guidance from the PRA(link is external) regarding the approach that should be taken by banks, building societies and PRA-designated investment firms in assessing expected loss provisions under IFRS9.
3. Guidance from the FRC(link is external) for audit firms seeking to overcome challenges in obtaining audit evidence.

In these extraordinary circumstances, previous market practices relating to the timing and content of financial information and the audit work that is done must change. These changes are likely to include:

• Modified audit opinions where auditors have been unable to gather the necessary audit evidence to complete the audit in full: for example, by limiting the scope of the audit opinion.
• Given the uncertainty about the immediate outlook for many companies, more audited financial statements that include disclosures that management is aware of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern.
• Changes to timetables for publication of financial information that had been set before the full implications of coronavirus were clear.

Click on the link for further information.