A new report from KPMG says there is widespread agreement that corporate reporting needs to be updated if it is to play its part in helping to restore the trust that has been lost in the wake of the financial crisis.
The future of corporate reporting: towards a common vision contains the views of key figures from different vantage points in the financial chain including preparers, users, standard-setters, regulators, and auditors.
KPMG's global chairman Michael Andrew said: 'If there is one point of consensus, it is that corporate reporting definitely needs to move on. It has to evolve if it is to be fit for purpose in a rapidly changing world.'
Common themes in the interviews contained in the report include the need to make corporate reports more forward-looking, the proper role of narrative reporting, and whether there is a need for more detailed reporting from the auditor and/or for the auditor to give assurance over a wider range of risks.
Joachim Schindler, global head of audit at KPMG, said:' As long as we have clear lines of responsibility, we are in favour of expanding the auditor's report. We have to do this. The issue is defining what more we should report.'
Interviewees highlighted the issues around how to achieve a balance between too much information and too little, how to provide more useful real-time information and how to deal with increasingly large volumes of data.
Mark Vaessen, global International Financial Reporting Standards (IFRS) leader at KPMG, said that despite the consensus for change and the availability of new technologies to help analyse corporate reports, making improvements would not be an easy process.
Vaessen said: 'The recent memorandum of understanding between the IASB [International Accounting Standards Board] and the IIRC [International Integrated Reporting Council] is a welcome step in the right direction, as it recognises the need to improve the quality and consistency of corporate reporting for the benefit of investors and the wider economy. It is important to keep this momentum going with involvement of all stakeholders.'
