FRC launches project on future of reporting

The Financial Reporting Council (FRC) has begun a major project which aims to challenge existing thinking about corporate reporting and consider how companies should better meet the information needs of shareholders and other stakeholders, as well as alternative ways of delivering that information

The regulator said the move is a response to the growing debate about the purpose of the annual report and the audience for it. The FRC also acknowledged that despite its initiatives such as ‘clear & concise’ and ‘cutting clutter’, there is ongoing pressure from users to streamline the annual report.  However, reporting requirements continue to increase, making it necessary seek a balance between the needs of users and the costs and practicalities of providing this information for companies.

During the project the FRC will review current financial and non-financial reporting practices, consider what information investors and other stakeholders require and fundamentally, the purpose of corporate reporting and the annual report. The different types of corporate communications produced by companies will also be examined.

Paul George, executive director of corporate governance and reporting at the FRC, said: ‘We are seeing developments in the responsible business agenda and the need for businesses to be accountable to a wider group of stakeholders. Reporting is evolving in response to these developments and so the project will examine the extent to which the annual report or other communication channels best serve all stakeholder needs.

‘Importantly, in a technology-enabled world, the FRC will consider other methods to facilitate the delivery of information to stakeholders.  New models for corporate reporting will inevitably lead to considerations of how audit and assurance models will need to evolve to respond to the changes. This project complements our work on the future of audit.’

The FRC expects that this project will result in a series of calls for action for changes to regulation and practice. During the second half of 2019, the FRC will publish a thought leadership paper consolidating the outcomes of the project.

The project will be supported by an advisory group and the FRC is calling for up to 15 participants to join a diverse group. The deadline for nominations for membership of the group is 15 November 2018. Applications to join the advisory group and ideas and suggestions on how corporate reporting should evolve should be sent to futurereporting@frc.org.uk

Report by Pat Sweet

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