"Increased diligence" called for in financial reports

News Article - Monday, December 17, 2007

filed under: Regulatory

The Financial Reporting Council (FRC) has issued a warning to accountants and auditors that additional care is needed when preparing financial reports this year.

According to the organisation, volatile market conditions have led to a number of liquidity challenges, there is an increased risk when preparing reports.

"Corporate reporting and auditing will be particularly challenging this year and needs to be matched by increased diligence and then clarity as to the basis on which judgements have been exercised," said chief executive of the FRC Paul Boyle.

The organisation also warned that the business review also requires additional care and that risks and uncertainties of the company must be reported fairly.

Ernst & Young recently announced that transfer pricing is one of the highest risks to companies when publishing financial reports, with 87 per cent of multinationals citing it as a danger.

The FRC has published a number of questions to serve as guiding principles for auditors and accountants preparing company reports. They can be accessed on the organisation's website.

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