Accounting Standards - Plcs also miss 60-day target
Large-company finance directors are failing to achieve the 60-day timescale for preparing preliminary accounts recommended by the Accounting Standards Board.
The shortfall was highlighted in research carried out by KPMG Management Consulting, which showed that only 48 of the top 100 public limited companies are currently releasing preliminaries within the 60-day time frame. Twenty-five of the top 100 released preliminary results between 60 and 70 days after their year-end date.
John Fanning, a consultant at KPMG, said the research provided little comfort for those firms currently unable to meet the 60-day target. He said: ‘The reporting cycle time needed by these organisations to meet the ASB’s target may seem achievable, but most of the top 100 plcs have failed to reduce their reporting time-scales to any marked degree in the last few years.’
Allan Cook, the ASB’s technical director, said the board was offering this guidance as part of a drive towards best practice. But, he added that shortening the reporting process would offer competitive advantage.
He said: ‘I think some companies were saying, “What is the point?”, but better ones are close to 60-day reporting and will try to make it. We are saying this is serious. In the US, companies are much better at reducing the timescale in reporting.’
A financial controller of an oil retailer in the FTSE-250 said the company took 90 days to provide 1997 preliminary accounting, but added the company would improve upon its record next year. He said: ‘Competitors are reporting earlier and we don’t want to seen to be out of step.’ He added that the ASB’s guidelines were also a driver.
A spokesman for FTSE-100 company Lucas Varity said it reported in the 60-day period.