Predicting an Uncertain Future: Narrative Reporting and Risk Information

This ACCA paper reviews the state of risk and business forecast information disclosure in narrative reporting. The analysis of the annual reports of companies across jurisdictions and  industries gives a balanced view of the current state of disclosure, and the many influences affecting narrative disclosure.


The industrial sectors from which the leading companies were selected were banking, chemical production, food production, oil and gas production, and general retail. The countries were the UK, Germany, the US, Canada, Australia, Malaysia and Singapore. As well as the annual reports of companies operating in the above sectors and countries, six dual-listed companies’ annual reports were also selected for the survey.


Legal requirements and voluntary guidance shape much of the disclosure information within annual reports, but some companies go further than the legal requirements. This perhaps signals a more extensive consideration of the companies’ risks and future prospects by its management.


More specifically, the disclosure of risk information follows two main tendencies: one for financial risk, and the other for non-financial risk.




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