Many of the issues identified could have been avoided if a sufficiently critical review of the annual report and accounts had been conducted prior to signing them off, the Financial Reporting Council (FRC) said in their annual review into the quality of corporate reporting.

The FRC said companies needed to ‘take a step back to consider whether the report as a whole is clear, concise and understandable, omits immaterial information and whether additional information is necessary to understand particular transactions, events or circumstances’.

There also tends to be too much boilerplate reporting about accounting for complex transactions, rather than drilling down to the reasons for the issues, while disclosure estimates frequently left out the rationale for the conclusion.