Some 23% of FTSE 350 companies are not adequately reporting to shareholders on the activities of their audit committees, producing in effect little more than a summary of the committees’ terms of reference, research by the Local Authority Pension Fund Forum (LAPFF) has found.

The LAPFF also found that the standard of audit committee reporting decreases as companies become smaller: 11% of FTSE 100 companies did not produce adequate reports, compared to 30% of Midcaps and 40% of SmallCaps.

The LAPFF released its research in response to the Financial Reporting Council’s consultation on the Combined Code. The Forum argues that many companies are not acting in the spirit of the Smith guidance, which provides a proposed outline for audit committee reports, and that the Code should therefore reinforce the need for an informative description of the work covered during the year, rather than a general statement of responsibilities.

Darrell Pulk, LAPFF chair, said: “Audit committee reports represent an area of company reporting where we believe there is substantial room for improvement. Simply disclosing terms of reference is not good enough. We want to see meaningful reports to shareholders”.