The ACCA finds that the growing complexity of rules and standards is at risk of seriously limiting the usefulness of narrative reporting.
The report finds that the divergent needs of shareholders and regulators are leading to overly-complicated and compliance orientated reports.
"Companies are trying to serve two masters at the same time," explains Professor Isobel Sharp, Deloitte audit partner. "They want to inform shareholders of what is happening in the business. They need to satisfy regulators by meeting all the disclosure rules. To achieve succinctly and simultaneously both outcomes in the same report is a major challenge."
The report finds that meeting legal and regulatory requirements was the most popular driver (83%) for narrative disclosures. Shareholders' needs came marginally (82%) behind this.
- The organisational significance of preparing narrative reports
- A mixed response to the single most important characteristic of narrative reports
- A diverse set of requirements/needs is driving narrative reporting
- Risk, future, business model and KPI disclosures are highly important for shareholders
- Regulations determining narrative disclosures
- Post-financial crisis: risk and future prospect disclosures are becoming a priority
- Integrated corporate reports: an evolving concept
- Number of requirements and cost and time involved: critical challenges
- Future of narrative reports: finance leaders want more discretion and less regulation