In response to the unprecedented challenges for companies in the face of the ongoing coronavirus pandemic, the UK’s Financial Conduct Authority (“FCA”) on 21 March 2020 published a statement requesting companies admitted to the Official List to observe a moratorium of at least 2 weeks on the publication of their preliminary financial statements. Subsequently, the FCA, jointly with the Financial Reporting Council (“FRC”) and Prudential Regulation Authority (“PRA”) announced on 26 March 2020 a series of actions with respect to financial reporting, including (i) a 2-month deadline extension for publishing listed companies’ audited annual financial reports (though there is no equivalent extension for half-yearly reports); (ii) encouraging listed companies to review their financial calendars to ensure sufficient time to make appropriate disclosures; and (iii) encouraging the postponement of planned auditor tenders. In addition, Companies House have confirmed that companies who require an extension due to the coronavirus outbreak, will be granted a 3-month extension to file accounts at Companies House. However, it is important to note that none of these measures affect the existing obligations under the Market Abuse Regulation (MAR) to announce inside information to the market as soon as possible unless there is a valid reason to delay disclosure.
The FCA, FRC and PRA have also encouraged investors, lenders and other users of financial statements to take into account the unique circumstances arising from the health crisis which may cause uncertainty in companies’ financial positions, potential delays in providing financial information, the need for additional audit work to support audit opinions and the increased use of modified audit statements.
For additional insights into the business and legal implications of the COVID-19 pandemic, please visit our Knowledge Center.
