Making Corporate Reports Relevant - A Call to Action

The Institute of Chartered Accountants of Scotland (ICAS) has a vision of corporate reporting that is simple: a readable and concise report that tells the story of the business – summarizing the key aspects of performance and prospects – with the detailed disclosures easily available from the company’s website. There is a growing dissatisfaction with a corporate reporting process viewed by many as an exercise in regulatory compliance. Often, stakeholders consider the preliminary results announcement and related presentations to be more relevant and useful than the full annual report. The reform of corporate reporting is now a global priority.

Accordingly, the ICAS has issued a call to action. It states that: “The time for debate and discussion is running out. Quality corporate reporting is fundamental to the operation of effective global capital markets, yet financial statements are increasingly being regarded as inaccessible, incomprehensible and inconsistent with the way in which companies are operated and managed. Our Short Form Report represents a significant improvement in communication with users and offers a next step which could be implemented quickly and with relative ease.”

It also states that: “We believe that the process of producing a Short Form Report following the above principles is a useful one, giving the directors an opportunity to tell their own story. Where this could replace an Annual Review and Summary Financial Statements and ultimately form the basis of a company’s results announcement, we believe it would not be an additional burden but a significant improvement in the delivery of quality corporate reporting. ICAS will now take forward these proposals in the context of the various consultations and the development of integrated reporting, and we will continue to exert our global influence in this critical debate.”

For more information, refer to the ICAS website and read the recently-issued publication Making Corporate Reports Relevant.