In the first review into the quality of annual reports produced by privately held companies, regulator calls for clearer and more concise reporting, saying there was far too much repetition and not enough transparency
The Financial Reporting Council (FRC) has produced its first report into the quality of annual reports produced by companies signed up to the voluntary Wates Principles, which govern the quality of financial reporting at the largest private companies.
The review criticised the fragmented approach to producing the information for the annual reports and duplication of too much content and a lack of cross referencing, making the end product hard to use.
Feedback from stakeholders suggested that various sections of annual reports prepared by the largest privately owned businesses are ‘often prepared by different individuals and teams across the organisation’, the FRC warned.
The regulator said ‘this fragmented approach can hinder the coherence and consistency of disclosures. Companies are encouraged to consider the annual report as a cohesive and integrated document. Making use of cross referring and reducing duplication within the report makes it easier for the reader to navigate and engage with the report’.
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