FRC

AGMs – Best practice needs to evolve

Post Date: April 27, 2020

There needs to be a review of the guidance on company AGMs. In these difficult and uncertain times it is vitally important that companies continue to engage with investors, that they keep them up to date with events and foster their support and commitment. Never has the importance of the AGM been so high. It is now a month since the current lockdown due to Covid-19 was introduced. This has coincided with a particularly busy period in the annual reporting season with ...

Dividends – ShareSoc and UKSA send joint letter to FRC, FCA and BEIS

Post Date: April 27, 2020

Many of our members are very concerned at the spate of recent dividend suspensions. Many members feel that private investors are much more concerned with the non payment of dividends than the problems at AGMs, about which we have blogged at length. Many members are somewhat surprised that ShareSoc have not pronounced on dividends, so it is timely to correct this. Not only are many private investors heavily dependent on dividends, so are many charities and pension funds. These points are very ...

FRC Consultation on Draft Plan and Budget 2020 / 21

Post Date: February 26, 2020

On 25th February 2020, in a joint ShareSoc/UKSA response we responded to the FRC request for comment as follows: Thank you for circulating the Draft Plan and Budget to us for comment. Overall, we like the document that the FRC has produced. Aspects that we particularly like include: The structure: it is logical and easy to follow The content: the issues raised are thoughtful and meaningful. It is good, for example, to see the issue of transparency mentioned specifically. It is also good ...

Brydon Audit Review and FRC Update

Post Date: December 20, 2019

Readers probably don’t need to be reminded of the poor reputation of auditors and accountants. The announcement yesterday from Staffline Group (STAF) reiterates the point. They note the latest...

FRC Fines Grant Thornton £650k, Ted Baker and Tullow

Post Date: December 12, 2019

A ShareSoc member emailed us to give his view: This is terrible. Why wouldn’t the FRC name the partner and the company involved, especially when Grant Thornton has been...

Retail Shareholder Participation in Voting – US study

Post Date: November 21, 2019

Cliff Weight, ShareSoc Director reviews Retail Shareholder Participation in the Proxy Process: Monitoring, Engagement, and Voting: Working Paper N° 637/2019 November 2019: By Alon Brav, Matthew D. Cain, Jonathon Zytnick This...

FRC: Individual Shareholders Engagement Meeting 5 Nov 2019

Post Date: November 7, 2019

This was an excellent event, well organised by the FRC with about 80 attendees from ShareSoc and the UK Shareholders’ Association. It is very reassuring to hear the underlying...

FRC New UK Stewardship Code and FCA response to DP19/1 Consultation

Post Date: October 27, 2019

The UK Stewardship Code 2020 is (according to the FRC) “a substantial and ambitious revision” to the 2012 edition of the Code which takes effect from 1 January 2020. The FRC says “The new Code sets high expectations of those investing money on behalf of UK savers and pensioners. In particular, the new Code establishes a clear benchmark for stewardship as the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, ...

Woodford, Buffett Bot and FRC Survey

Post Date: October 20, 2019

There was a very good article in the FT on Saturday on the “rise and fall of a rock star fund manager”, i.e. Neil Woodford. Essential reading for those who...

FRC Enforcement of its Rules

Post Date: August 6, 2019

by Cliff Weight, ShareSoc Director Very belatedly, the FRC has substantially increased tough action to tackle poor quality audit. To me, these were the key words which showed that for the last ten years the FRC had dreadfully understaffed this activity - "The Enforcement Division has grown significantly in recent years reflecting the FRC’s investment in what has become recognised as one of the organisation’s key functions. A decade ago the team comprised just six members. By 31 March 2019 it had been expanded to ...

Renold Accounts, Audit Quality and Abnormal Price Movements

Post Date: July 11, 2019

Chain maker Renold (RNO) has provided the latest example of sloppy accounting work. On the 9th July it reported that it had identified accounting issues in the three years ending March 2017, 2018 and 2019. Assets and profits were overstated and liabilities were understated in the Torque Transmission division. In total adjusted operating profits were overstated by £1.8 million. As a result the AGM is being postponed to give time for revising the Annual Accounts. Their auditors are Deloitte. The Financial Reporting ...

Redcentric (RCN) Campaign: Important Developments

Post Date: June 29, 2019

There have been important developments in our campaign regarding the accounting scandal at IT service group, Redcentric. Firstly the FRC have moved at "lightning speed" (by their usually interminable standards), and published their findings in little more than two years after the matter was brought to their attention. And secondly there is news on the parallel FCA investigation in Redcentric's recently published annual results for 2018/19. FRC Report The FRC concluded that Redcentric's auditors, PwC, did not meet expected professional standards in their audits ...

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