RegulationAccounting StandardsNon-financial information must be as reliable as financial counterpart, ICAEW says

Non-financial information must be as reliable as financial counterpart, ICAEW says

Non-financial information should face similarly stringent testing to financial data, ICAEW finds in report

Non-financial information must be as reliable as financial counterpart, ICAEW says

NON-FINANCIAL INFORMATION must be as reliable as its financial counterpart for investors to make informed decisions, according to ICAEW.

Today’s report from the institute, The journey milestone 4: materiality in assuring narrative reporting, found that the ‘materiality’ test for financial information must be similarly applied to non-financial information.

The ICAEW said the same assurance principles apply to both financial and non-financial information, so assertions should be tested for; completeness, occurrence and accuracy, as well as presentation and how easy they are to understand.

The report cites the recent diesel car emissions scandal as a perfect example that illustrates how important non-financial aspects are.

The disclosure last year that Volkswagen installed devices to circumvent mandatory emissions regulations for its diesel engines has caused the company’s shareholders and bondholders to suffer billions of euros in losses.

Head of the ICAEW’s audit and assurance faculty Henry Irving said: “As important as financial statements are, business accountability is not based entirely on the balance sheet. Investors, and others also want to know about company’s corporate social responsibility, carbon emissions, diversity or ethics.

“When establishing materiality levels preparers and assurance providers should focus on both qualitative and quantitative aspects.”

Related Articles

Treasury Select Committee report released on Making Tax Digital

Accounting Standards Treasury Select Committee report released on Making Tax Digital

8m Stephanie Wix, Writer
New Year Honours of 2017

Accounting Standards New Year Honours of 2017

9m 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

10m Stephanie Wix, Writer
Six ways Brexit will impact companies’ financial statements

Accounting Standards Six ways Brexit will impact companies’ financial statements

1y Richard Crump, Writer
FRC proposes changes to FRS 101

Accounting Standards FRC proposes changes to FRS 101

1y Richard Crump, Writer
'Clear' tax avoidance guidance for advisers issued by institutes

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

11m Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

11m Stephanie Wix, Writer
Eight landmarks in the history of accountancy

Accounting Standards Eight landmarks in the history of accountancy

11m Acccountancy Age