Details

  • Service: Audit, Financial Statement Audit, Integrated Audit, Attestation Services, Advisory, Risk Consulting, Financial Risk Management, Internal Audit and Regulatory Compliance, IT Related Risk & Compliance
  • Industry: Consumer Markets, Diversified Industrials, Energy & Natural Resources, Insurance, Investment Management, Private Equity, Retail, Technology, Healthcare & Life Sciences, Banking & Capital Markets
  • Type: White paper
  • Date: 11/14/2011

Disclosure overload and complexity: hidden in plain sight 

Post-1994, financial reporting standards setters, including regulators, have issued more than 200 new documents (such as Emerging Issues Task Force (EITF) consensuses, accounting standards, Accounting Standards Updates (ASU)), significantly expanding disclosure standards. This has made disclosures complex and requires various industry and event-specific types of disclosures.
This publication suggests that disclosure has increased significantly in volume and complexity. It poses a dilemma for smaller investors who may make suboptimal investment decisions due to their inability to absorb the volume and complexity of literature. Further, footnotes are the most significant source or cause of complexity. According to the respondents, fair value, derivatives, and hedging also complicate disclosures.