The Financial Reporting Review Panel, one of Britain's audit watchdogs, released its first report into the United Kingdom's accounting principles, saying it found "no evidence of systemic weakness."
Spurred on by the accounting frauds that bankrupted U.S. energy giant Enron and Italian dairy Parmalat, the panel randomly reviewed 226 sets of accounts, finding only three breaches of reporting requirements significant enough to issue a public notice. Established in 1990, the panel is part of the Financial Reporting Council, whose mission is to promote confidence in corporate reporting and governance.
The review covered a period spanning January 2004 to March 2005. Of the three public notices, two were issued to private companies and the third related to a minor issue concerning goodwill and intangible assets.
The panel asked 77 of the reviewed companies for further information, and 38 of those companies said that they would include such information in future statements.
"We were encouraged by the answers from companies to the panel's questions about their accounts," said the panel's chairman, Bill Knight, in a statement. "So long as we can rely on a constructive response, we can continue the consensual and common sense approach to enforcement which has been a key factor in the panel's success to date."
