RegulationAccounting StandardsNarrative reporting regulation threatens its usefulness, study finds

Narrative reporting regulation threatens its usefulness, study finds

ACCA/Deloitte report finds complexity of narrative reporting requirements causing problems in providing relative information to shareholders

The usefulness of narrative reporting for shareholders is being threatened by
the increasing complexity of rules and standards surrounding it, according to a
new survey.

  • Read the Insider Blog – click
    here.

The joint ACCA and Deloitte study of 230 chief financial officers in listed
companies found that they were struggling to meet the dual requirements of
shareholders and regulators.

“Companies are trying to serve two masters at the same time,” said Deloitte
audit partner Isobel Sharp. “They want to inform shareholders of what is
happening in the business. They need to satisfy regulators by meeting all the
disclosure rules. To achieve succinctly and simultaneously both outcomes in the
same report is a major challenge.”

The report found that 65% of those interviewed wanted a narrative reporting
environment with more discretion and less regulation, 58% would like to see the
inclusion of an external audit opinion and 51% would like to see guidance issued
by the IASB.

“[Shareholders] want to know about the state of the business,’ said Ron
Dissinger, chief financial officer, Kellogg Company. ‘They can read and
interpret our financial statements. What they want set out in the narrative are
clear statements on the state of the business and drivers of performance.”

Related Articles

PwC CEE strikes partnership with LSBF

Accounting Firms PwC CEE strikes partnership with LSBF

11m Accountancy Age editorial
Treasury Select Committee report released on Making Tax Digital

Accounting Standards Treasury Select Committee report released on Making Tax Digital

11m Stephanie Wix, Writer
ACCA launches Education Global Forum

Accounting Standards ACCA launches Education Global Forum

11m Stephanie Wix, Writer
ACCA and Morison KSi sign global MOU

Accounting Standards ACCA and Morison KSi sign global MOU

11m Stephanie Wix, Writer
Accountants need to prepare for 50 public sector forces, outlines ACCA report

Accounting Firms Accountants need to prepare for 50 public sector forces, outlines ACCA report

1y Stephanie Wix, Writer
ACCA announces partnership with RD Tax Solutions

Accounting Standards ACCA announces partnership with RD Tax Solutions

1y Stephanie Wix, Writer
Record fine for Deloitte and audit partner over Aero misconduct

Accounting Standards Record fine for Deloitte and audit partner over Aero misconduct

1y Stephanie Wix, Writer
'Clear' tax avoidance guidance for advisers issued by institutes

Accounting Standards 'Clear' tax avoidance guidance for advisers issued by institutes

1y Stephanie Wix, Writer