ACCA Canada

ACCA Canada

February 23, 2012 12:17 ET

It's Annual Reporting Season: Is Yours Up to Par?

TORONTO, ONTARIO--(Marketwire - Feb. 23, 2012) -

Latest ACCA report - called Re-assessing the value of corporate reporting - shows a need for greater focus on forward-facing plans, risk management, and the effective integration of these and other issues into corporate reports in a more coherent way.

Corporate reports are being held back by confusion over their different audiences, their complexity, and lack of timeliness, according to ACCA's (the Association of Chartered Certified Accountants) survey of annual report users ahead of the annual corporate reporting season.

This is important because 'for all the concerns that stakeholders express about corporate reporting, our survey strongly suggests that the annual report has not diminished in its significance for investors and other stakeholders,' says Ian Welch, ACCA's head of policy. 'In fact, the annual report seems to have become more important since the financial crisis, with users reviewing reports more carefully than ever. However, confusion and complexity has hamstrung reports to an extent; they could be much better than they are. Corporate reports are still documents that add value for stakeholders, but investors should be positioned as the most important audience for the report.'

The survey of 500 investors, capital providers, suppliers, customers, and report preparers in Canada, the UK, and the U.S. found that:

  • 50% of respondents named the annual report as their primary source of information about a company
  • 41% said the corporate report was an easy way to assess information about a company
  • 48% said too much 'promotional material' crept into reports
  • 47% thought that reports were too long
  • 40% said reports were too general purpose
  • 35% felt reports are too backward-looking
  • 35% said reports were too complex; of this figure, 68% blamed reporting standards and 61% blamed legal requirements
  • 26% felt it was difficult to assess a company's performance from their corporate report

The survey also asked what information stakeholders wanted to see in reports that was not there already:

  • 71% thought companies should report more on potential risks that could affect their performance
  • 70% said the most pressing issue for companies to report on was how they intended to manage or mitigate key risks
  • 59% said the inclusion of social and environmental data through an integrated report would add value.
  • Stakeholders expressed an interest in real-time, externally assured, reporting

'Annual reports can add real value for businesses and investors,' says Suzanne Godbehere, head of ACCA Canada. 'But, as the survey shows, there are some real issues in today's reporting. Reports need to be simplified, they need to be written with investors in mind, and they need to be more forward-looking and evidently risk aware. Hopefully the survey provides an encouraging backdrop against which regulators, standard-setters, and companies can go about simplifying, clarifying, and adding more value to corporate disclosures.'

Ian Welch concludes that, 'It was noteworthy that while respondents reported a drop in interest in social and environmental information - perhaps understandable in difficult economic times - they suggested integrated reporting might be a way of reviving the value of this data to report users. And it was clear that the profession has to focus attention on speeding up the provision of corporate information to users.'

Notes to Editors

1. The report is called Re-assessing the value of corporate reporting and can be found on ACCA's website:

  1. ACCA is not affiliated with any chartered accountant (CA) organization.
  2. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
  3. We support our 147,000 members and 424,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
  4. ACCA Canada has around 2,100 members and 1,000 students in Canada.

Contact Information

  • Suzanne K. Godbehere
    Head of ACCA Canada
    416-966-2225 or 1-888-801-0011