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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.

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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.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.