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FCA seeks two-week moratorium on financial statements

23 March 2020: the Financial Conduct Authority (FCA) has asked companies on the cusp of publishing preliminary financial statements to delay their plans for at least two weeks due to the COVID-19 pandemic.

In a statement released on Saturday, the watchdog said: “The FCA will be writing tonight to companies it is aware were intending to publish preliminary financial statements in the next few days to delay their planned publications.

“The FCA strongly requests all listed companies observe a moratorium on the publication of preliminary financial statements for at least two weeks.”

The organisation is working with the Financial Reporting Council (FRC) and the Prudential Regulatory Authority (PRA) to develop a package of measures aimed at ensuring companies take the necessary time to prepare appropriate disclosures with a vow to announce further details shortly.

It found that “the practice of issuing preliminary financial statements in advance of the full audited financial statements is adding unnecessarily to the pressure on companies and the audit profession at this moment.”

Market Abuse Regulations remain in force and listed companies must still announce inside information to the market as soon as possible unless a valid reason to delay disclosure exists.
Commenting on the statement, ICAEW Chief Executive Michael Izza called it a “sensible move”.

“We would like to see it extended to interims and annual accounts. Companies and their auditors face severe practical difficulties when assessing key aspects of reporting such as asset valuations and risk under the extraordinary conditions imposed by the COVID-19 epidemic,” said Izza.

“We are involved in urgent discussions with Government, regulators and the profession about further developments in this area, including the need for further guidance on reporting and auditing.”