On 27 April 2017, the FRC issued a discussion paper on the role of auditors and preliminary announcements, intending to provoke discussion about how the value of preliminary announcements may be improved. It proposes changes from the current auditor guidance, including:
- expanding the parameters of current FRC auditor guidance to include voluntary engagements where companies outside the main UK listed market ask their auditors to agree the release of a preliminary announcement—the FRC proposes that the guidance should be extended to AIM companies as well as its current application to Main Market companies;
- requiring audits to be complete and the auditor's report on the statutory financial statements to be signed before preliminary results may be released in order to mitigate the risk of mismatching information and to provide more clarity;
- requiring a bespoke auditor's report to be contained alongside the preliminary announcement instead of the full statutory auditor's report; and
- requiring auditors to have completed their review of 'other information' in the annual report before agreeing to the publication of a preliminary announcement to ensure that auditors may complete their review of the preliminary announcement in an informed and meaningful way.
Comments that the FRC receives on this paper will be used to inform changes to the auditor guidance, and the FRC will consult formally on these proposed alterations.
The full text of the discussion paper is available at:
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