The Financial Reporting Council has published its Annual Review of Corporate Reporting 2025/26, showing that FTSE 350 companies maintained reporting standards while smaller listed businesses narrowed the quality gap.
Trends in UK Corporate Reporting Quality
The Financial Reporting Council published its Annual Review of Corporate Reporting 2025/26 on 29 September 2026. The evaluation indicates that reporting standards among FTSE 350 companies remained stable, while the performance gap between larger listed organisations and other audited entities decreased.
Substantive enquiry letters issued following FRC reviews declined for the second consecutive year. The regulator noted that this drop reflects a positive trend across its risk-based sample of annual accounts.
Frequent Focus Areas and Guidance for Preparers
Despite overall progress, the review highlighted recurring technical accounting issues. The topics generating the highest volume of substantive queries included cash flow statements, financial instruments, asset impairment, fair value measurement, and revenue recognition.
To mitigate these issues, the FRC recommended establishing clear internal review procedures to catch technical compliance errors before publication. The regulator also emphasised that companies should maintain a coherent narrative across all sections of their annual report and accounts.
Regulatory Supervision and Forthcoming Changes
The FRC Corporate Reporting Review team continues to support preparers by highlighting good practice, sharing market insights, and issuing challenges when disclosures fall short of requirements. This oversight aims to sustain investor trust across UK financial markets.
Looking forward, the FRC pointed to several significant upcoming developments that demand preparation. These include the implementation of IFRS 18, revisions to FRS 102, and the introduction of Provision 29 of the UK Corporate Governance Code regarding material internal controls.
The regulator concluded that effective reporting goes beyond technical compliance, providing clear insight into corporate strategy, risk management, and performance to encourage informed investment decisions and broader economic growth.
Frequently Asked Questions
What were the most common technical accounting issues identified by the FRC?
The most frequent areas resulting in substantive FRC enquiries were cash flow statements, financial instruments, asset impairment, fair value measurement, and revenue recognition.
Which upcoming reporting standards should UK businesses prepare for?
The FRC highlighted upcoming developments including the implementation of IFRS 18, revisions to FRS 102, and Provision 29 of the UK Corporate Governance Code regarding material internal controls.
