FRC finds UK reporting quality holding steady, with tagging still a work in progress
Disclosure isn’t much use if the underlying data isn’t up to scratch. In its Annual Review of Corporate Reporting 2025/26, published this week, the UK Financial Reporting Council (FRC) finds that quality across the FTSE 350 is consistent with last year. Smaller companies, on the other hand, are closing the gap, with improved quality.
The FRC raised substantive queries, which signal a possible material breach, in 28% of reviews, down from 37%. More of this year’s reviews were lighter-touch thematic ones, which helped, but so did better reporting. Cash flow statements top the problem list again, mostly because of misclassified cash flows. Complaints about possible breaches in company reports doubled to 65, coinciding with wider use of AI and the accompanying increase in commentary.
Listed companies have filed in iXBRL since 2021. This year, for the first time, the FRC’s Digital Reporting & Taxonomies team worked alongside its reviewers, examining 30 companies’ tagged reports. Tagging is now firmly embedded, the FRC concludes. Even so, unnecessary extensions, tags chosen by label instead of accounting meaning, earnings per share scaling errors and ignored validation warnings all persist.
These problems can be fixed at source, and the stakes are rising. From April 2028, Companies House will require every company, listed or not, to file iXBRL accounts via commercial software. Tagging habits formed now will shape UK corporate data far beyond the listed market. The FRC’s call for clearer ownership of tagging decisions and stronger review processes looks like sensible preparation.
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