The Financial Reporting Council (FRC) has recently unveiled its plans for a major new project on the future of corporate reporting, alongside calls for participation. With the objective of challenging ‘existing thinking about corporate reporting’ and considering ‘how companies should better meet the information needs of shareholders and other stakeholders’, the project is very timely.
The announcement demonstrates the FRC’s intent to remain an active commentator on international corporate reporting as the UK prepares to leave the EU. This is important; there are serious decisions to be made sooner rather than later about the future of corporate reporting, as discussed in our 2017 report, What’s Next for Corporate Reporting?
Corporate reporting is constantly evolving in the light of external events, changing business and regulatory environments, and in particular the information needs of an ever-widening range of users. It will therefore be particularly important for the FRC to evaluate the audience for the information in corporate reports. The diverse information needs of stakeholders may mean it is no longer appropriate or useful to produce a single report containing all of the information required by all parties. Many reporters in the UK are already embracing alternative forms of reporting for information not primarily aimed at investors.
Another important question is the role that technology can play in meeting the needs of corporate reporting users. We hope that the FRC project will consider how to harness technology to better address issues that might previously have been difficult to solve, building on the work of its Financial Reporting Lab.
Nigel Sleigh-Johnson, ICAEW Head of Financial Reporting, Audit and Assurance, recently commented: “With the UK’s departure from the EU imminent, the UK financial reporting community needs to up its game in terms of the development and sharing of accounting thinking and practice, aiming to become a leading member of the global standard-setting partnership that has emerged from the widespread adoption of IFRS. We hope that this FRC initiative marks the start of this process”.
To find out more about the project, visit frc.org.uk