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Reaching Key Financial Reporting Decisions: How Directors and Auditors Interact by Tony Hines, Vivien Beattie, Stella Fearnley

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10

Case 6 — Pochard plc

It came down to, ‘This is our house view’, and ‘We don't want to do it’, and ‘It is our house view’, then ‘We're not doing it!’ (Peter, finance director)

10.1 BACKGROUND TO THE CASE

Pochard is a manufacturing company. The company operates in the UK and overseas. The UK market is very competitive. Raw materials are subject to a reasonably high degree of price fluctuation which can have a considerable impact on results. In recent years there has been modest growth but pre-tax profits have remained under pressure.

The finance director is Peter (aged in his 40s) who is a qualified accountant. He joined Pochard over ten years ago having had previous experience as finance director in another plc and also in public practice.

The audit committee chair is Alan (in his 60s) who joined the board of Pochard five years ago. He was previously a partner with an accountancy firm and is currently serving on a number of other boards.

The current audit engagement partner is Henry is who is based in the local office of a Big Four firm. He took over the role in the second year after the adoption of IFRS, although many of the issues relevant to the previous year's accounts continued into subsequent years.

In contrast with the other companies who took part in this research study, the three interviewees decided that they would prefer to be interviewed together rather than separately.

10.2 CORPORATE GOVERNANCE

According to the annual report the board consists of three executive ...

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