FRC to examine the Future of Corporate Reporting, calls for participation

30 Oct 2018 11:52 AM

The Financial Reporting Council (FRC) yesterday launched a major project to challenge existing thinking about corporate reporting and consider how companies should better meet the information needs of shareholders and other stakeholders.

The FRC will review current financial and non-financial reporting practices, consider what information investors and other stakeholders require and fundamentally, the purpose of corporate reporting and the annual report. The different types of corporate communications produced by companies will also be examined.

In recent years there has been a growing debate about the purpose of the annual report and the audience for it. Despite initiatives such as ‘Clear & Concise’ and ‘Cutting Clutter’, there is ongoing pressure from users to streamline the annual report.  Reporting requirements though continue to increase so the FRC will seek a balance between the needs of users and the costs and practicalities of providing this information for companies.

Paul George, Executive Director of Corporate Governance and Reporting at the FRC, yesterday said,

“Accounting and reporting plays an important role in building trust in business and providing information for investment decisions, and the Annual Report is one of the cornerstones of reporting. However, corporate reporting is wider than this. We are seeing developments in the responsible business agenda and the need for businesses to be accountable to a wider group of stakeholders. Reporting is evolving in response to these developments and so the project will examine the extent to which the annual report or other communication channels best serve all stakeholder needs.”

“Importantly, in a technology-enabled world, the FRC will consider other methods to facilitate the delivery of information to stakeholders.  New models for corporate reporting will inevitably lead to considerations of how audit and assurance models will need to evolve to respond to the changes. This project complements our work on the future of audit.”

The FRC expects that this project will result in a series of calls for action for changes to regulation and practice. During the second half of 2019, the FRC will publish a thought leadership paper consolidating the outcomes of the project.

The project will be supported by an advisory group and the FRC is calling for up to 15 participants to join a diverse group. The deadline for nominations for membership of the group is 15 November 2018. Applications to join the advisory group and ideas and suggestions on how corporate reporting should evolve should be sent to futurereporting@frc.org.uk.

Notes to editors:

1. The FRC’s mission is to promote transparency and integrity in business.  The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
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