FRC seeks views on the role of auditors in relation to preliminary announcements

The Financial Reporting Council has published a discussion paper seeking views on a number of options in relation to preliminary announcements and the role of auditors. These include the possibility of releasing a form of auditor’s report with the preliminary announcement. Although preliminary announcements have been voluntary since 2007, most listed companies continue to publish them.

The feedback from the discussion paper will inform the FRC’s update of its current guidance for auditors, Bulletin 2008/2. The options include:

• extending the scope of the current FRC auditor guidance to include voluntary engagements where companies outside the main UK listed market (such as AIM) ask their auditors to agree the release of preliminary announcements;
• requiring audits to be complete and the auditor's report on the underpinning statutory financial statements to be signed before preliminary results can be released;
• including a form of auditor’s report with the preliminary announcement. It is not possible to include the full statutory auditor's report, since preliminary announcements constitute 'non-statutory' accounts and Section 435 Companies Act 2006 prohibits companies from publishing the auditor's report on the statutory accounts with non-statutory accounts.

Comments in response to the discussion paper must be submitted by 23 June 2017. The FRC will then consult on revisions to its guidance for auditors.