Innovate before it’s too late. That was a key message that came through loud and clear at the Fostering Innovation in Corporate Reporting event hosted by EFRAG last week. For many, the next ten years will be a pivotal time for companies, governments and other stakeholders to tackle ever growing concerns over global environmental and social issues, such as climate change and human rights. And while corporate reporting alone cannot solve these matters, it certainly has a part to play. For example, it can provide transparency on company activities, improve accountability, and even serve as a catalyst for change.
What are the challenges and why is change needed?
Traditional corporate reporting is currently facing a number of challenges. Some of the key challenges discussed at this week’s event echo those considered in ICAEW’s 2017 report What’s next for corporate reporting: Time to decide? In particular:
The debate on these challenges and the future of corporate reporting is set to continue. However, perhaps one thing that was evident from this week’s event was how this debate is moving away from more conceptual considerations about the future towards a strong desire to find practical solutions to these challenges. As Andrew Watchman, EFRAG TEG Chairman and CEO concluded: ‘Now is the right time for the right ideas.’
The Financial Reporting Faculty will continue to consider this topic and will produce commentary on key aspects of this debate over the course of 2019 and beyond. The Financial Reporting Council has also embarked on an initiative this year to consider the future of corporate reporting. Progress in this area is important, not least because of the matters discussed above, but also in light of the parallel and fast-moving debate currently taking place around the future of audit.
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