UK - Almost a quarter of large UK companies do not provide proper reports to their shareholders on audit practices, suggests a survey by the Local Authority Pension Fund Forum (LAPFF).
The LAPFF announced today research of 439 UK companies between January and July 2007, excluding investment trusts, but including 90 of the FTSE100 companies, revealed 23% of the FTSE350 companies do not disclose more than a summary of their audit committees' terms of reference.
According to the study, "Some of these reports are fairly meaningless," a spokesman for the LAPFF told IPE today.
The research, conducted in response to the Financial Reporting Council's (FRC) recent consultation on the Combined Code on corporate governance, also found the smaller the company, the worse the reporting practices become.
"The forum discovered 11% of the FTSE100 did not produce adequate reports, compared to 30% of Midcaps and 40% of Smallcaps," the LAPFF said in a release today.
LAPFF chair Darrell Pulk has called for action from the FRC, arguing auditing has become an increasingly high-profile corporate governance issue, amid concerns about the independence of auditors and the concentrated nature of the consultancy sector.
"Simply disclosing terms of reference is not good enough," commented Pulk.
"We want to see meaningful reports to shareholders, and the Forum believes the FRC can use the recent consultation on the Combined Code as an opportunity to encourage better practice," he added.
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