PracticeAuditFirms isolated over real-time reporting

Firms isolated over real-time reporting

Senior finance directors and institutes issue reservations over 'Big Six' push on real-time reporting, leaving firms isolated

Finance directors in the UK have come out in strong opposition to the global
accounting firms call last week for ‘real-time’
reporting.

The call for the move came last week during an international
Global Public Policy Symposium in Paris.

The firms proposed to move away from quarterly reports, in favour of
‘real-time’ reporting, which would allow investors access to company figures
throughout the year.

HSBC group finance director, Douglas Flint, said the demands of reporting
information in real time and responding to media and investor queries would be
substantial.

‘For organisations that have already spent millions implementing
international financial reporting standards, this is a serious issue.

‘The last thing institutions want is daily or weekly information. What would
they do with it? And would they be regarded as negligent if they hadn’t spotted
something that was put up an hour ago,’ he told the FT.

Tomkins finance director, Ken Lever,
said the accounting firms had ‘missed the point’.

‘Investors are interested in more relevant and reliable information, which
they can use to make investment decisions,’ he said.

Jon Symonds of Astrazeneca said pharmaceuticals already released weekly data
in various areas: ‘It’s not practical everywhere and God forbid having to do
real-time financial reporting.’

Meanwhile, the accounting institutes have also issued reservations about the
idea. ICAS expressed fears that it would exacerbate short-termism. CIMA said
investors wanted quality data, not just larger quantities of data, and ACCA said
the case had not been made ‘convincingly,’
the Herald
reported
.

The institute and FD reservations add to reluctance from regulators about the
move, too, leaving the firms comparatively isolated on the issue.

Paul Boyle of the FRC said that real-time reporting was ‘very tricky.’

The SEC has been an evangelist about real-time reporting, however, with
chairman Christopher Cox having publicly backed the idea.

Further reading:

Big Four demand real-time reporting

Clash
over benefits of internet-based reporting

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