City frustrated by reporting

The study found 78% of investors wanted more information on what assumptions
financial statements are based on and 74% wanted clarification on exactly what
constituted exceptionals. A clearer divisional breakdown highlighting exactly
where companies make their money would be welcomed by 58%.

Richard Bennison, head of audit at
KPMG, said: ‘Getting the
balance right between meeting regulatory requirements and providing accessible
and useful insight is clearly key. I hope that the principles-based approach
will continue to be strongly embedded ­ otherwise there is the danger that we
will see financial statements becoming more and more complex and opaque to the
common user.’

Many of them believe accounts are increasingly becoming regulatory filings
rather than documents offering real insight into the ongoing performance of a

The survey examined areas of reporting such as financial statements, emerging
markets, accounting procedures, ethical investment and views on London’s
position as a financial capital.

While they had concerns about clarity and consistency, investors believed
that overall the amount of information given in financial statements was
adequate, with the principles-based approach to accounting receiving a clear
thumbs-up as 70% of respondents favoured it over the more rules-based US

Investors also identified the introduction of Sarbanes-Oxley-type rules, the
scrapping of the FSA’s light-touch approach and changes to the overall
regulatory demand as the biggest threats to UK prosperity.

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