For those that take an active interest in the reporting agenda much has
happened in the last 12 months around the introduction of IFRS and more recently
the business review. But perhaps the biggest challenges involve ensuring that
reporting remains relevant and accessible to those it was originally created for
– shareholders and investors.
The principal concern stems from the conversion process between US GAAP and
IFRS, and the influence this process is having on the direction of travel. While
it is too early to cry foul, there remains a vast amount to do to ensure that in
five years’ time we have a reporting model capable of delivering real
information needs of shareholders and investors.
It is this fundamental challenge which brought together a group of
individuals with a mission to present new ideas to enhance the current reporting
model. The multi stakeholder group, formed under the banner – ‘Report leadership
– Tomorrow’s reporting today’ comprises the
Institute of Management Accountants,
Yeldar and Tomkins.
To make its ideas practical and realistic, we are focused on what is
achievable today within current GAAP or IFRS models by improving disclosure and
presentation of information. In responding to investor needs the issues covered
were grouped under three main areas.
First, broader information should be provided which is future oriented and
capable of assisting investors in their cash flow modelling. The information
should cover critical contextual, non financial and financial information, key
performance indicators, data points and key sensitivities.
Second, a few selective areas ought to be covered to show how rethinking
disclosures and introducing new forms of presentation can enhance financial
Lastly, making information accessible and engaging is vital. The report
creates a cohesive picture of strategic intent and historic performance. By
careful use of structure, messaging and navigation reports should be easy to
read, navigate and identify what’s important.
We’ve set out to provide practical ideas that are intended to be today’s
reality rather than tomorrow’s pipe dream. Change will take many years to occur
but a key short term challenge is to understand that changes to the accounting
model cannot address the deficiencies of current reporting.
David Phillips is corporate reporting partner at
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