Under the new procedures, companies that make a significant change to their report and accounts as a result of an intervention by the FRC, will be identified as having received ‘Committee Reference’  in the regulator’s Corporate Reporting Review annual report. There will also be a brief description of the issues involved. 

The operating procedures provide an explanation of when a Committee Reference may be requested or a press notice issued by the FRC’s Conduct Committee for  a specific case.

They also make clear that the Conduct Committee’s letter to a company may include comments on aspects of reporting, other than compliance with mandatory requirements, to encourage improvements to the quality of its future reporting. This could include recommendations to improve the quality and brevity of the annual report in line with FRC's drive to reduce clutter in annual reports.

In addition, the FRC says that where a company voluntarily refers to its exchange of correspondence with the Conduct Committee, it will have to submit the wording of its proposed text in advance of publication to the Committee so that any references made in the annual report are ‘factually correct, fair and balanced’.

There is also a detailed description of complaint management procedures, including details of how anonymous complaints are handled and advice for whistleblowers.

The new procedures, which have been the subject of a public consultation and have been approved by Department for Business, Innovation & Skills (BIS), apply with immediate effect

David Childs, chairman of the FRC’s Conduct Committee said: ‘These amendments to the operating procedures will provide greater transparency to investors who rely on company reports and accounts to make and justify their long term investment decisions. 

'They will help us to meet the expectations of a regulatory environment where increased transparency is both expected and required in order to enhance trust in corporate reporting.’