Directors’ responsibilities statements—company accounts

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Directors’ responsibilities statements—company accounts
  • Requirements for a responsibility statement
  • Requirements under the Disclosure Guidance and Transparency Rules
  • Requirements under the UKCG Code and the Listing Rules
  • Auditors' responsibility statements
  • DTR requirements—annual financial reports
  • Who should sign DTR responsibility statements
  • Example of a DTR responsibility statement in an annual financial report
  • DTR requirements—half-yearly report
  • Example of a DTR responsibility statement for a half-yearly report
  • More...

Directors’ responsibilities statements—company accounts

A company's annual report and accounts will often include an appropriate description of directors' relevant responsibilities for the preparation of those accounts. Certain companies are legally required to include such directors' responsibility statements and other companies include them as a matter of best practice. This Practice Note summarises the requirements to include directors’ responsibilities statements within the annual accounts and reports of certain companies under the Disclosure Guidance and Transparency Rules (DTRs) of the Financial Conduct Authority (FCA), the UK Corporate Governance Code (UKCG Code) of the Financial Reporting Council (FRC) and the Listing Rules of the FCA (Listing Rules) .

The origins of the directors' responsibility statement can be found in the 1992 Cadbury report, which recommended that the report and accounts of a company should include a formal statement by its directors to the effect that responsibility for preparing the accounts rests with the board of directors, and that this should be positioned alongside a statement by the auditors in the auditors' report about their reporting responsibilities. The purpose of such a statement is to make it clear to shareholders where the boundaries between the duties of directors and auditors lie and to remove any misconception that the auditors are responsible for the accounts.

Responsibility statements were introduced for issuers of securities on regulated markets by the Transparency Directive 2004/109/EC, which

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