CRR Case Summaries and Entity-specific Press Notices
The FRC publishes, on a quarterly basis, summaries of its findings from recently closed reviews that resulted in a substantive question to a company (‘Case Summaries’). In addition, it publishes the names of companies whose reviews were closed in the previous quarter without the need for a substantive question. No Case Summary is prepared for such reviews.
Case Summaries, which are available for cases closed in the quarter ending March 2021 onwards, are included in the table below. As, currently, the FRC is subject to existing legal restrictions on disclosing confidential information received from a company, the Case Summaries can only be disclosed with the company's consent. Where consent has been withheld by the company, that fact is disclosed in the table.
From March 2018 until March 2021, the FRC published the names of companies whose reviews were closed in the previous quarter but did not prepare Case Summaries. However, on an exceptional basis, specific cases may be publicised through entity-specific Press Notices, which can also be found in the table below.
The FRC’s reviews are based solely on the company’s annual report and accounts (or interim reports) and do not benefit from detailed knowledge of the company’s business or an understanding of the underlying transactions entered into. They are, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting framework. The FRC’s correspondence with the company provides no assurance that the annual report and accounts (or interim reports) are correct in all material respects; the FRC’s role is not to verify the information provided but to consider compliance with reporting requirements. The FRC’s correspondence is written on the basis that the FRC (which includes the FRC’s officers, employees and agents) accepts no liability for reliance on its letters or Case Summaries by the company or any third party, including but not limited to investors and shareholders.
Key
- Only a certain number of CRR’s reviews result in substantive questioning of the Board. Matters raised may cover questions of recognition, measurement and/or disclosure.
- CRR’s routine reviews of companies’ annual reports and accounts generally cover all parts over which the FRC has statutory powers (that is, strategic reports, directors’ reports and financial statements). Similarly, CRR’s routine reviews of companies’ interim reports will generally cover all information in that document. Limited scope reviews arise for a number of reasons, including those conducted when a company’s annual report and accounts or interim report are selected for thematic review or reviews that have been prompted by a complaint. In accordance with the FRC's Operating Procedures, for Corporate Reporting Review, CRR does not identify those companies whose reviews were prompted by a complaint.
- The FRC may ask a company to refer to its exchanges with CRR when the company makes a change to a significant aspect of its annual report and accounts or interim report in response to a review.
- Case closed after 1 January 2021 but performed under operating procedures that did not allow for the publication of Case Summaries.
- From the quarter ended June 2023, the FRC started identifying the auditor of the annual report and accounts, or the audit firm that issued a review report on the interim report, that was the subject of the CRR review. This information was also back-dated for closed cases publicised from the quarter ended September 2022. Cases marked N/A relate to those published prior to September 2022 or interim reviews that did not have a review opinion.’
Case Summaries
CRR Case Summaries and Entity-specific Press Notices (Excel version)
| Entity | St James’s Place plc |
|---|---|
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | STV Group plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Taylor Wimpey plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Ted Baker plc |
| Balance Sheet Date | 30 January 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | The Bankers Investment Trust PLC |
| Balance Sheet Date | 31 October 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | The Gym Group plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | The Mercantile Investment Group Plc |
| Balance Sheet Date | 31 January 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | The National Farmers Union Mutual Insurance Society Limited |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Business interruption claims due to the Covid-19 pandemic We asked for further information about the insurer’s potential exposure to claims for business interruption (BI) due to the Covid-19 pandemic and its approach to accounting for, and the disclosure of, a related potential group action threatened against the company. The company provided a satisfactory response to our enquiry. It clarified that, as an insurer, and as potential liabilities relating to its insurance contracts or claims which may arise from such contracts are accounted for under FRS 103 ‘Insurance Contracts’, the requirements of section 21 ‘Provisions and Contingencies’ of FRS 102 did not apply in relation to BI claims or the threatened group action. The company explained that it had not provided FRS 103 disclosures about the BI claims, including the threatened group action, because the potential exposure regarding the nature and extent of the risk was not determined to be material to its 2021 annual accounts. |
| Entity | The Weir Group PLC |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | TI Fluid Systems Plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Tritax Big Box REIT Plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | Trustpilot Group plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Vodafone Group Plc |
| Balance Sheet Date | 31 March 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | YouGov plc (3) |
| Balance Sheet Date | 31 July 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Capitalisation of panel acquisition costs The company recognises intangible assets relating to its consumer panels, which comprise some of the costs of recruiting new members to the panel. We requested further information from the company to help us understand the basis for the conclusion that these costs meet the criteria for capitalisation, which it disclosed as a critical judgement. We enquired specifically about the unit of account applied to panel assets and how this links to the way in which the panel assets are utilised and managed. We also asked the company to explain how the requirements of IAS 38, ‘Intangible Assets’, had been considered when developing its accounting policy. The company explained that each monthly cohort of panellists in an individual country is recognised as a separate asset. The company explained the basis for capitalising panel acquisition costs and the rationale for using the unit of account chosen. The company agreed to enhance the critical judgement disclosure in its 2022 annual report and accounts. Statement of cash flows We asked the company to confirm whether the cash flow for ‘settlement of deferred consideration’ related to consideration which was contingent upon the future employment of the former owners of acquired businesses. The company confirmed it was and acknowledged that the resulting cash flow should have been classified as an operating rather than investing cash flow. We requested an explanation of the calculation of cash flow amounts for both ‘purchase of intangible assets’ and ‘acquisition of subsidiaries’ as it appeared some cash flows were included within both. The company confirmed that it had double-counted some amounts by including them in both cash flows and also identified several other offsetting errors made in the presentation of the cash flow statement. The company agreed to restate the comparatives in its next annual report and accounts for each of the above changes. As all of these affected a primary statement, we asked the company to disclose the fact that the matters had come to its attention as a result of our enquiry. We also asked the company to explain the rationale for classifying some intercompany cash flows in the parent company cash flow statement. The company acknowledged that it would have been more appropriate to reclassify some of the amounts but noted that it intended to adopt FRS 101, ‘Reduced Disclosure Framework’, and take the exemption from presenting a parent company statement of cash flows in its future reporting. We closed our enquiries on this basis. Deferred tax assets for share options We requested more information on how the tax impact of share options, both current and deferred, has been accounted for and whether the reductions in deferred tax assets related to the exercise of share options. IAS 12, ‘Income Taxes’, requires tax deductions in excess of the cumulative remuneration expense for share-based payments to be recognised directly in equity. The company confirmed that it had correctly accounted for the split in deferred tax between the income statement and equity. However, on the exercise of the share options all current tax, and the reversal of previously accumulated deferred tax, had been included incorrectly within the income statement, despite the total tax deductions being in excess of the cumulative remuneration expense for the associated share-based payments. Following our enquiry, the company also identified additional adjustments to the presentation of deferred tax assets and liabilities. The company agreed to restate the comparatives in its next annual report and accounts for each of the above changes. As all of these affected a primary statement, we asked the company to disclose the fact that the matters had come to its attention as a result of our enquiry. Other deferred tax assets We also asked the company to explain the extent to which the change in the future UK corporation tax rate had been recognised in the carrying amount of deferred tax assets and the reasons for a reclassification of deferred tax assets. The company explained how it had considered the impact of the rate change. It also confirmed that several of the items included within the reclassification should not have been described as such. The company agreed to correct this in future annual reports and accounts, noting that it did not consider the amounts to be material. |
| Entity | abrdn plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | September 2022 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice | N/A |