The International Accounting Standards Board (IASB) has released highlights of a survey conducted recently on financial information disclosures, ahead of its public discussion forum on Disclosures in Financial Reporting. Respondents to the survey identified various factors that contribute to the disclosure problem.
The IASB received 225 responses from respondents across Africa, Asia, Europe and North America. Around 50 percent of those responses came from preparers and approximately 20 percent came from users of financial statements.
The survey finds that over 80 percent of respondents agreed that improvements could be made to the way financial information is disclosed. Half of those respondents felt that such improvements were required across all parts of the annual report, and not just the financial statements.
Most preparers of financial statements identified the primary problem as disclosure requirements being too extensive with not enough being done to exclude immaterial information—which has been referred to as disclosure overload.
Many users of financial statements felt that preparers could do more to improve the communication of relevant information within the financial statements, rather than leaving users to sift through large amounts of data.
A range of views on the underlying causes of the problem was identified. Some respondents felt that more could be done to improve the way in which accounting standards are set out. Others expressed concerns that preparers, auditors and regulators are approaching financial reporting as an exercise in compliance rather than as a means of communication.