In recent years, the criticism of current financial reporting has become increasingly louder. On the one hand, the lack of relevance of the information provided is denounced; on the other hand, the scope of the annual reports and consolidated financial statements is constantly expanding, so that the actual core statements are lost among the many details (“disclosure overload”).
The reasons for this are diverse. They range from new requirements made by the parties setting the standards, to the interpretation and enforcement of requirements by statutory auditors and enforcers, to a perspective that is more oriented towards formal compliance than relevance.
Agenda of the International Accounting Standards Board (IASB)
On the agenda of the IASB, the topic of “Better Communication in Financial Reporting” is of great importance and will continue to play an important role in the future. For example, the IASB is currently dealing with the structure and content of the “Primary Financial Statements,” with questions of how and where information should be disclosed (“Principles of Disclosures”) or the determination of materiality.
ESMA Opinion on Improvement in Reporting
In October 2015, the European Securities and Markets Authority (ESMA) highlighted the need to improve the quality of financial reporting (business reporting). The aim is for companies to address their specific needs instead of using standard formulations. Relevant information should be made available in an easily accessible way, contribute to clarity and conciseness on the basis of the principle of materiality, improve the readability of financial reports and provide consistent information overall. ESMA encourages companies to take the decisive steps while statutory auditors and national enforcers simultaneously contribute to this development.
Optimization of your Business Reporting
We will help you achieve your individual goals of optimizing your business reporting. Our experience has shown that these are diverse and include, for example, the goal of a quantitative reduction of the annual report, a qualitative improvement in financial reporting or the annual report rating.
Our scalable, proven approach that can be adapted to your needs lets us work with you to quickly achieve the goal jointly and efficiently.