The chief executive of the UK's Financial Reporting Council (FRC) has asked investors to encourage more transparent, relevant and thorough financial reporting from UK companies.

In a public letter to investors dated 17 March, Stephen Haddrill urged investors to hold UK entities accountable for their reporting obligations, particularly for governance, risk reporting and dividend disclosures.

The FRC, responsible for UK and Irish financial reporting standards, made these comments in light of several important new accounting standards, which have been approved by the International Accounting Standards Board (IASB) but have not yet come into effect. These standards are:

• IFRS 9 (financial instruments – not yet endorsed in the EU)
• IFRS 15 (revenue recognition – effective date deferred to 1 January 2018)
• IFRS 16 (leases – not yet endorsed in the EU)

Haddrill said that shareholders should ask entities to provide “information they believe is relevant and to challenge where reporting falls short of expectations”.

He particularly focused on three areas:

• Companies that apply the UK Corporate Governance Code must provide enhanced reporting on risk and internal controls. Those who choose not to apply certain parts of the code should give clear reasons for doing so, which Haddrill encourages investors to examine and question. Companies should also provide a viability statement, which should cover a period significantly longer than 12 months.
• Companies should be more thorough in their reporting of principal risks in their strategic report. Investors sometimes feel that companies are neglecting to report some key principles risks, such as the impact of climate-change, the threat of cyber security or the ramifications of the UK leaving the European Union.
• Investors should also challenge companies that provide insufficient information on dividend policies.