The International Accounting Standards Board (IASB) has called for a joint effort across the profession to tackle the issue commonly known as ‘the disclosure problem’.
IASB’s call comes as the majority of respondents to a recent survey it conducted on financial information disclosures agreed there is room to improve disclosures.
According to the survey, preparers of financial statements are complaining about not enough being done to exclude immaterial information to prevent disclosure overload, while users say more data transparency to show the relevance of a disclosure is required.
"That feedback indicated a need for standard-setters, auditors, preparers, regulators and investors to work together in order to deliver much-needed improvements to all disclosures," IASB chairman Hans Hoogervorst said.
Responding to the IASB survey, head of ICAEW’s Financial Reporting Faculty Nigel Sleigh-Johnson admits that "radical restructuring of disclosures and how they are presented" may be required.
"So-called ‘disclosure overload’ will not be resolved unless it is tackled together by all the bodies who impose disclosure requirements. That way it may be possible to reduce duplication and unnecessary complexity," he stated.
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The full results of the IASB survey will be published during the first quarter of 2013 along with the results of the IASB Disclosure Forum, which will take place on 28 January 2013 in London.
The survey results were aggregated from 225 respondents across Africa, Asia, Europe and North America – 70% of them preparers or users of financial statements.