UK and European reporting times catch up with US

UK and European reporting times catch up with US

Survey reveals financial reporting times by UK and European companies are closing in on those of US counterparts, depite Sarbox and IFRS

The financial reporting of British and European companies is fast catching
up with that of American businesses.

A report released today by Business Performance Management International (BPM
International) reveals that more than 50% of FTSE100 companies have
significantly reduced their reporting times for year-end results.

The BPM International survey of 527 top companies in seven European countries
(and the US) found that UK and European Companies have cut down their reporting
times by an average of four days.

The three fastest-reported results were by Imperial Tobacco with 32 elapsed
days, AstraZeneca with 33 elapsed days, and British Sky Broadcasting with 34
elapsed days.

Over the past three years large British companies such as Shire
Pharmaceuticals, British Sky Broadcasting, Lloyds TSB, Rexam and BG Group have
all achieved reporting reductions of at least 15%.

These increases come as some UK companies wrestle with both Sarbox
legislation and the implementation of IFRS.

‘This trend is even more impressive given the pressures for British and
European corporations to move to International Financial Reporting Standards and
the need for 20% of the European companies we studied to prepare for
Sarbanes-Oxley compliance themselves from next year,’ said BPM International
chairman, David Jones.

‘At the same time, US Companies appear to have been hit very hard by the new
regulations introduced by Sarbanes-Oxley and the SEC.’

However, despite closing the gap on their US counterparts, the gap is still
significant, with US companies signing off their audits an average of nine days
early, coming in at an average of just 28 days.

By the time the largest British companies started to report (after 32-33
elapsed days) in January, more than 70% of the US Top 100 had already declared
their full year results.

US companies who report within 20 elapsed days include Cisco, Alcoa,
Genentech, Dell Computer, Lehmann Brothers, Hewlett-Packard, IBM, J P Morgan
Chase, Pfizer, Motorola and General Electric.

Jones said the close cycle time is regarded as a key benchmark by many chief
financial officers, finance directors and analysts.

‘The speed of close is symptomatic of the state of underlying finance
processes and systems and therefore of the management processes and systems in
general,’ he said.

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