FRC concludes that a listed entity failed to recognise an impairment loss on equity investments and its auditor failed to identify the misstatements

17 Dec, 2021

The FRC adopted an enquiry report and an investigation report, which found that:

(a) a listed entity (Listed Entity) failed to recognise an impairment loss on the available-for-sale equity investments (the Investments) in the consolidated financial statements for the year ended 31 December 2016 (2016 Financial Statements); and

(b) the auditor (the Auditor) of the Listed Entity failed to identify the material misstatements in relation to the impairment of the Investments in the 2016 Financial Statements.

In light of the findings of the enquiry, on 15 December 2021, the FRC required the Listed Entity to remedy the inclusion of the materially misstated impairment loss of the Investments information in market disclosures about the Listed Entity by retrospectively adjusting the impairment loss recognised in the relevant years as disclosed in the financial summary of the latest annual report to be issued.

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