Press Room
Grant Thornton calls for corporate reporting review
In its response to the discussion paper, Louder Than Words,
Grant Thornton has urged the FRC to challenge international
accounting standards setters and regulators directly over the
complexity of financial reporting and called for a re-think on how
to build a mechanism for helping preparers to deliver more
meaningful financial reports.
Steve Maslin, Chair of Grant Thornton's Partnership Oversight
Board, welcomed the FRC's paper as a useful contribution but argues
that more detailed work is necessary to create an environment where
businesses provide investors with more useful and accessible
financial information.
"The ability of financial statements to signpost to different
user groups the information they need in a comprehensive but
understandable way is increasingly under scrutiny.
"Investors frequently tell us that annual reports are poorly
structured; the complexity and volume of information often obscures
key messages; and management fails to tell the story because it
does not put financial information in the context of business
strategy and targets to measure implementation of that
strategy.
"The complexity of the current reporting framework is not
conducive to companies from being more open with investors.
Instead, companies all too often take the safe option of making
statements which minimise the risks of litigation and investor
criticism. Companies comply with the regulations but, in doing so,
fail to deliver meaningful information.
"In the current environment, there is little incentive for
business to change its approach, but there is a limit to what can
be achieved through more regulation and standards. We need a
re-think on how to bring together a body of authoritative market
participants who can help, not hinder, a framework which enables
investors and other users to get to the key information they need
straight away", Maslin concluded.