The UK financial regulator, the Financial Conduct Authority (FCA), has recently given out a letter to companies that the regulator knows is planning to publish a preliminary financial statement within a few days’ time. Within this letter, the UK watchdog asks these companies to enact a delay on these planned publications.

Requesting Delays On Preliminary Financial Statements

As it stands now, the FCA is making a strong request from all the listed companies to enact temporary suspension of preliminary financial statements. This is expected to go on for at least two weeks but could be drawn out longer, depending on the circumstances.

A Turbulent Time To Speculate

The FCA took the time to explain its actions. The reasoning is that investors within the capital markets need to rely on trustworthy information regarding companies. This, in turn, shows these investors which instrument can be traded and which should be abandoned.

With the fact that these last couple of weeks had events unfold on an unprecedented scale, the way companies report and plan the future experienced a considerable amount of change within the same time.

With this information in mind, consideration must be made for future events unfolding just as unpredictably, and what the companies predict now, might likely not be what will happen. With the regulator-mandated observing tables already set before the crisis unfolded, the timeframe may not allow for companies to accurately calculate the future of their company.

Working With All Regulators To Solve The Problem

Another contributing factor is the fact that the audit profession and listed companies as a whole are facing an array of challenges amid the coronavirus crisis. As it stands now, the FCA is convinced that issuing preliminary financial statements in advance of fully audited ones, will only add unneeded pressures on the various audit professions and companies within this time.

However, the FCA was quick to stipulate that this does not account for fully audited financial statements. These statements are mandated to be published within four months of the end of a company’s fiscal year.

The FCA furthered their statement by revealing that it is in talks with both the PRA and the Financial Reporting Council. These talks are in regard to the measures needed to be taken in order to allow companies the necessary time to prepare the appropriate disclosures, as well as address the practical challenges of this time. The three regulating bodies have made it clear that they will announce the result of their talks in short order.