The FRC, in collaboration with a cross-regulatory group including the FCA, Companies House, HMRC, and the Charity Commission for England and Wales, has unveiled a comprehensive discussion paper.
This initiative seeks to reshape the future of digital reporting in the UK and adapt to the shifts in the regulatory environment brought on by the Economic Crime and Corporate Transparency Act 2023.
For over ten years, the FRC has spearheaded the development of the UK Taxonomy Suite, which is instrumental in facilitating high-quality and uniform digital reporting. This framework not only alleviates the administrative load on businesses but also fosters economic growth by making it easier for investors to access and assess data, while also ensuring regulators can verify compliance with legal and regulatory standards.
The paper extensively covers potential shifts from the European Single Electronic Format (ESEF) taxonomy for UK regulated markets and explores the introduction of new structured digital reporting protocols to enhance regulatory disclosures.
Moreover, it discusses the necessity for mandatory assurance on digital tagging and examines the repercussions of comprehensive tagging requirements on various entities including companies and charities. It also outlines strategies to aid stakeholders in adjusting to these forthcoming digital reporting standards.
The FRC is actively seeking feedback from a diverse set of stakeholders, such as financial report preparers, investors, software vendors, accountants, and regulatory bodies. The council aims to refine and advance digital reporting practices in the UK to better serve the informational needs of all users while enhancing transparency, comparability, and operational efficiency in corporate reporting.
“Through this discussion paper, we are eager to engage with our stakeholders to explore how we can further evolve digital reporting in the UK to maximise its benefits for businesses,” Financial Reporting Council CEO said, “Market intelligence, information, and data are increasingly vital for both decision-making and outcome monitoring, underscoring the importance of our continued strategy for UK taxonomies.”
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