More than half of companies have never heard of new Financial Reporting Standard

Even though tens of thousands of British businesses have already begun to change the way they compile their accounts in order to meet the new Financial Reporting Standard 102, the survey of SME finance departments found that more than half of respondents have never heard of the new standard.

Even more felt they didn’t know enough about the new regime to be able to gauge its likely impact on their business, and even among those who were aware of the changes, more than a third said they didn’t understand them sufficiently. A paltry 5 per cent said they understand FRS 102 well.

But even more striking was the way respondents are preparing – or rather, not preparing – for the imminent arrival of the new standard. Just one in 10 has begun preparing, with almost a third saying they know what needs to be done but are yet to start. An alarming 58 per cent admitted they have done nothing as they don’t know how to start. In total 90 per cent have so far failed to prepare.

Those polled gave a bleak assessment of their preparedness for the change. Nearly two thirds described themselves as “not at all ready”, with a mere 5 per cent declaring themselves “completely ready”.

Yet despite this lack of preparation, there is a surprising level of complacency. 42 per cent of respondents said they are still “hoping for the best”, with a further 16 per cent feeling “completely confident”.

Nauzer Siganporia, audit partner at HW Fisher & Company, comments: “FRS 102 represents the biggest shake up in the way companies keep their accounts in years. Its arrival is almost upon us, with many thousands of businesses already beginning the transition to the new standard – so it is worrying that so many finance departments still know so little about how it will impact their company.

“While their lack of action appears in large to stem from a combination of inertia and even confusion, more worrying still is the apparent complacency that many feel about the changes. Doing nothing and hoping for the best is not a sound way to get their house in order in time for the new regime’s coming into force next January.

“Not all companies will be affected by the FRS 102 changes; many will be able to follow the revised Financial Reporting Standard for Smaller Entities (FRSSE), which is due to come in at the same time. But choosing which of these two standards to adopt is an important decision, and any company finance departments that are still unclear what is required of them should take expert advice as soon as possible.

“Now is the time to begin the transition to the new standards, and we at HW Fisher & Company are helping our clients prepare by offering them regular updates, seminars and face to face meetings.”