Accounting watchdog puts pressure on directors to justify the statements they give about their companies' futures
Companies will have to explain why they think they can continue as a going concern, as fears grow about corporate failures and the economic climate, according to the Financial Reporting Council.
The accounting watchdog is overhauling guidance on the statements given by companies about their futures, with directors required to examine closely the assumptions that underly them.
Ian Wright, director of corporate reporting at the FRC said the credit crisis had placed strain on banks, which have become cautious about whom they lend money to.
See full Article.