Both the UK Accounting Standards Board and the government’s review of company law are looking at ways of improving the Operating and Financial Review – a narrative report on a company’s performance and future plans.
Now in its fifth year PwC unveiled its own annual review of best practices in financial reporting. Findings revealed that companies are still not doing enough in this area.
David Phillips, PwC European ValueReporting leader, said: ‘Companies need to do more in communicating risk and return. The volatility of share prices is driven by a lack of communication.
He added that the frequency of information was of no importance over the quality.
PwC partners also took the opportunity to express concern over the now infamous Sarbanes Oxley Act.
Glyn Barker, head of audit and business advisory services, said: ‘Rushed legislation is bad legislation. More importantly the legislative changes completely miss the point. They fail to address the real problem – the reporting model is still wrong.’
Of the Act, Kieran Poynter, senior UK partner, said: ‘I wouldn’t suggest it’s a model to be adopted anywhere else in the world.’
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