In October of 2015 Accountancy Europe – at that time, the Federation of European Accountants – issued a discussion paper entitled The Future of Corporate Reporting – creating the dynamics for change. It questions how corporate reporting needs to adapt to economic reality and stakeholder expectations. The discussion it generated has been incredibly fruitful and encouraging. We received written responses, engaged with stakeholders, and heard from a wide audience at numerous events.
We summarised the feedback collected and our expected next steps in a short Follow-up piece, where you can also find quotes from some of the respondents. The overall message was clear: the debate demands to be pursued, and some of the concepts put forward need to be developed.
One of the key concepts put forward by the paper is a presentation idea called CORE & MORE. As the name suggests, we envisage an executive summary of the most relevant and material information (CORE) supported by more detailed reports which address specific audiences (MORE). The reactions we received were very positive, and stakeholders asked that Accountancy Europe elaborate the model even further. I’m excited to see how this will develop, as it’s an opportunity to create a new way of preparing and analysing reporting and make use of technology.
Integrated Reporting is probably the most developed and promising initiative in trying to improve the interconnectivity of various strands of reporting. We believe that Integrated Reporting is consistent with the CORE & MORE concept, i.e. both recommend reporting what is really crucial to the value creation of the entity. We will explore in greater detail how they relate to each other as we elaborate the CORE & MORE model.
Looking ahead, bringing stakeholders a holistic picture of entity performance (combining both financial and non-financial information) should be the primary ambition of corporate reporting. We identified the need to develop a principles-based reporting framework for non-financial information reporting, which was strongly acknowledged by respondents to the paper. This type of reporting can be more forward-looking than purely financial information, and can showcase how businesses are creating added value. One or more parties should therefore take ownership in developing such a framework, an initiative Accountancy Europe is keen to support.
Technology is expected to change not only how we view corporate reports, but also how we prepare them. We will further research how technology can impact corporate reporting, including online and automated reporting, as this will affect the experiences and expectations of end users and the entities themselves. Ultimately, we see technology not only as an enabler of change, but also as a driver. Professional accountants have always adapted as technology evolved, and I believe we are at a stage where there is a real opportunity for the profession to leverage these changes.
Accountancy Europe will continue the future of corporate reporting debate by focusing on three key actions: develop the CORE & MORE concept, support the need for a non-financial information reporting framework, and research the impact and opportunities of technology. The first of these will address the CORE & MORE concept, which we expect to publish in the fall of 2017. We will also be hosting an event in September where stakeholders will share their experiences and expectations for the future of corporate reporting. To learn more about this initiative, check out the Follow-up paper on our website.