The report – The future of corporate reporting: towards a common vision – contains the views of influential figures from key different vantage points in the financial chain: preparers, users, standard-setters, regulators, auditors.
KPMG’s global chairman Michael Andrew, writing in the foreword of the report, says: “If there is one point of consensus, it is that corporate reporting definitely needs to move on. It has to evolve if it is to be fit for purpose in a rapidly changing world.”
Mr Andrew adds that good corporate reporting has an important role to play “in helping to restore the trust that has been lost.”
Common themes in the interviews include: the need to make corporate reports more forward-looking; how to achieve a balance between too much information and too little; how to provide more useful real-time information and to deal with ‘Big Data’; the proper role of narrative reporting in the ‘front end’; whether the notion of ‘integrated reporting’ could be the “next big thing”; and whether there is a need for more detailed reporting from the auditor and/or for the auditor to give assurance over a wider range of risks.
Joachim Schindler, Global Head of Audit at KPMG, says that auditors would be willing to expand the content of their audit reports, if the agreed parameters were right: “As long as we have clear lines of responsibility, we are in favour of expanding the auditor’s report. We have to do this. The issue is defining what more we should report.”
The interviewees in the report are:
- Neri Bukspan, Executive Managing Director at Standard & Poor's
- Stephen Haddrill, CEO of the UK’s Financial Reporting Council
- Hans Hoogervorst, Chairman of the International Accounting Standards Board
- Julie Hudson, Head of Global Sustainability at UBS
- Brian Hunt, CEO of the Canadian Public Accountability Board
- Christoph Hütten, Senior Vice President, and Mark Deinert, Executive Vice President, at SAP
- Mervyn King, Chairman of the International Integrated Reporting Council
- Sandra Peters, Head of Financial Reporting Policy at the CFA Institute
- Russell Picot, Group Chief Accounting Officer at HSBC
- Joachim Schindler, Global Head of Audit at KPMG International
Mark Vaessen, Global IFRS Leader at KPMG, warns in his introduction to the report that despite the consensus for change and the availability of new technologies to help analyse corporate reports, it will not be easy to make change happen.
He says: “In practice, it will require a concerted effort by preparers, investors, auditors, standard-setters and regulators to move corporate reporting in the desired direction.
“The recent memorandum of understanding between the IASB and the IIRC is a welcome step in the right direction, as it recognises the need to improve the quality and consistency of corporate reporting for the benefit of investors and the wider economy. It is important to keep this momentum going with involvement of all stakeholders.”
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