Huge disparities cloud new reporting rules
Deloitte warns that limited companies are struggling to produce detailed management statements every six months
Listed companies are struggling to adhere to new rules requiring them to
produce detailed management statements every six months, Deloitte has warned.
In a survey of 198 plcs with March year-ends, Deloitte found huge disparities
in the way companies made the interim management statements (IMS), which came
into effect in January.
The research found that almost one in eight of companies surveyed had failed
to produce a statement at all. Close to two-thirds of the businesses failed to
report on the entire time period required. A mere 16% of the statements
contained all the content required under the new rules.
‘The IMSs published display a great variety in quality of content, level of
detail and length, as well as compliance with the IMS requirements,’ said
Deloitte audit
partner Isobel Sharp.
Up to now the UK Listing Authority has favoured a market-led approach to the
reporting and content of IMSs, but is proposing a full review of the new rules.
The body has said it will introduce more guidance on the use of IMSs if
required.
The statements have been criticised for adding to the regulatory burden
carried by companies without enhancing the information available to analysts and
investors.
It is also unclear exactly who will regulate the statements. The UK Listing
Authority established the reporting regime but the Financial Reporting Review
Panel, an arm of the Financial Reporting Council, has not explicitly stated
whether it will take responsibility for monitoring compliance.