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March 26, 2020

FCA Eases Financial Reporting Requirements, in Face of Pandemic

Audit data access challenges among the cause for the move...

By claudia glover

The UK’s markets watchdog is letting publicly listed businesses delay their financial reports by an unprecedented extra two months as part of a wider initiative for temporary relief for listed companies amidst the pandemic.

Under the temporary relief announced today the FCA will, among other things, refrain from suspending companies from the markets if they publish financial statements within six months of their year-end. (Businesses currently need to publish audited financial statements within four months of their financial year-end.)

The FCA cited current challenges in obtaining audit evidence as among the “challenges of corporate reporting during the coronavirus crisis.”

One market watcher told Computer Business Review that among the issues being faced by many businesses was the impact of various “shared services” centres across the world closing. (These scan and process huge volumes of paper invoices. An estimated 500 billion invoices are processed annually, with analyst firm Ardent Partners suggesting that 49.7 percent of invoices are still sent manually.)

The FCA said today: “We would urge all those companies that feel it appropriate to utilise the additional two months to do so.

“We urge market participants not to draw undue adverse inferences when companies make use of the extra time our temporary relief gives them, for a great many companies it will be a sensible decision to make in unprecedented times.”

This move came as COVID-19 is dramatically changing the financial landscape, as institutions are forced to accommodate for the pandemic.

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The FCA gave further detail in a statement this morning:

“The FCA is able to exercise forbearance in circumstances where it deems this appropriate. The FCA deems the COVID-19 pandemic and the ensuing challenges facing listed companies and their auditors as sufficient grounds to exercise the forbearance necessary to achieve the desired outcome”.

The Irish Data Protection Commission is making a similar allowance today, as it provides for an extension of two months to businesses facing GDPR data requests.

The data protection organisation said: “Where an organisation, due to the impact of COVID-19, cannot respond to a request in full or in part within the statutory timelines, they remain under an obligation to do so and should ensure that the request is actioned as soon as possible. For accountability and transparency purposes, the reasons for not complying with the timelines should be documented by the organisation and clearly communicated to the affected individuals”.

See also: Payments Watchdog Relaxes Anti-Fraud Deadline for Banks

 

 

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