Profession urges reports revamp

Financial reports should be geared towards how companies are managed and
according to what investors want, senior figures have said; in the latest
expression of discontent over regulatory interference.

The Report Leadership Group – made up of CIMA, PricewaterhouseCoopers,
Tomkins FD Ken Lever and PR group Radley Yeldar – launched their model of
financial reports this week, which they say aims to be informative and
accessible without swamping investors in unnecessary detail.

The proposal – in the form of accounts of a fictitious company called
Generico – comes on the back of widespread criticism from investors, who feel
that financial reports have become compliance documents instead of a means of
providing investors with necessary information.

David Phillips of PwC said the report should prompt the standard setters to
consider how they could foster beneficial change. ‘If you look at the reporting
model today, it is focused mainly on accounting, not even the best financial
reporting. This is part and parcel of the challenge,’ he said.

‘The model is missing a large piece of the jigsaw. In the past, companies
addressed that by working information into the market and building other
elements of information into this.’