December 10, 2021


This time last week as an early Christmas gift for us all the FRC announced its areas of supervisory focus for the 2022/23 review year.

Unsurprisingly there was a clear sustainability focus with TCFD and Climate-related reporting in financial statements being the first of six corporate reporting thematic reviews planned and climate-related risks being the first of seven focuses for audit quality reviews.

Another area of audit review focus is the impairment of assets. Although on the face of it there is not an automatic sustainability connection, there may well be for some industries, particularly those which are carbon heavy or reliant on assets which have a high carbon consequence. Where this is the case organisations should consider their future ways of working and business strategy plans to ascertain whether or not the life, or use, of these assets may be limited when compared to the position at the last reporting date and whether as a result an impairment to the value of the asset may be required. Similarly this consideration should be applied to inventory where it is thought that there may be a change to consumer choice and therefore a reduced demand for the inventories held.


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