CFA UK’s annual survey of some 450 respondents identified ‘Financial statements (income, balance sheet, cash flow)’ as the most useful element of reporting, cited by 85% of respondents (down from 88% the previous year). However, a third (32%) also wanted to see improvements in this area.

Half (54%) saw ‘Principal risks and uncertainties’ as the most important piece of reporting, up from 47% the previous year, but it was also identified as the one most in need of improvement according to 39%.

Last year, the chief executive’s review was thought to be the second most useful section of annual reports with 55% of respondents rating it very useful. This year that number has dropped to 34%. The chairman’s statement and the CFO’s statements are also thought to be less valuable this year than last, with the number of respondents describing these as very useful falling from 33% to 21% and 53% to 42%, respectively.

The number of respondents that think financial reports contain too much irrelevant information has fallen from 60% in 2015 to 55% in 2016, but the number that think that important information is omitted from financial reports has remained steady at 55%.

The number of respondents that think that the quality of financial reporting has improved over the last 10 years has fallen from 71% in 2015 to 62% in 2016.

Will Goodhart, chief executive of the CFA Society of the UK, said: ‘It is interesting to note that respondents have this year reduced the value they assign to narrative statements, with the exception of the principal risks and uncertainties report. Given their reliance on the financial statements and the principal risks report, it continues to be a cause of concern that these sections are those considered to be in greatest need of improvement.’