Jessica Fino 22 Jun 2018 10:35am

FRC questions RPC’s reporting compliance

Plastic-packaging maker RPC has revealed it has been questioned by the Financial Report Council (FRC) for the past three months over its reporting requirements

The company said in its annual report that the FRC Conduct Committee has been questioning its compliance to reporting requirements.

RPC launched an internal review of its accounting standards and disclosures, including an assessment of the effectiveness of PwC, its external auditor since 2015.

The first letter was received in March this year, asking the company to help the FRC understand how it had satisfied “relevant reporting requirements”.

RPC’s group finance director and controller responded the following month. The FRC replied with more questions and information requests. Two more letters were exchanged afterwards.

The company said it was considering how to enhance some aspects of its accounting and disclosure prior to the FRC’s letters, but reviewed its non-audit fees and conducted an annual assessment of PwC, after receiving them.

The assessment took into account the systems and procedures adopted by the Big Four firm and included a questionnaire that RPC widened to include feedback from individuals within the business who interacted with PwC.

The company said that, while the assessment has not yet been fully completed, it is satisfied that the external audit process is effective and PwC’s objectivity and independence are properly safeguarded.

A spokesperson for the FRC explained, “We review aspects of some 220 reports a year. Of the full-scope reviews that we perform, some two/thirds of the companies receive letters asking for additional information and explanation to help us better understand their reporting.”

They added that the FRC’s guidance to Audit Committees “encourages companies to report the extent and nature of any intervention from the FRC in their next report and accounts that they publish – and which RPC has now done.”

RPC said it has included some enhancements in this year’s annual report and addressed the matters raised by the FRC, including the introduction of new accounting standards and disclosures in relation to alternative performance measures.

The re-appointment of PwC, as well as its remuneration, will be voted during the company’s annual general meeting next month.