by Daniel Milroy Maher

A recent study, Understanding Investors: directions for corporate reporting, by the Association of Chartered Certified Accountants (ACCA) revealed that more than two-thirds of investors have lost trust in company reports since the onset of the global financial crisis.

Those who held this view felt that managers "have too much discretion over the financial numbers they report" and they valued external information over "traditional" corporate reports; the only exception in this case being areas such as profit warnings and emerging risks and opportunities where they believed quick access to information was more important than assurance.

"The decline in trust in corporate information since the global financial crisis suggests there is a bigger role for audit to play in rebuilding confidence in company statements," said ACCA director of policy, Ewan Willars.

Quarterly reporting also faced criticism with 75% believing it created short-termism in the market and distracted management. Willars was keen to keep it in place however, "given the mixed feelings on the individual company and market effects it is seen as having."

Other findings from the 300 investors (across 150 institutions) surveyed revealed majority opposition to the usefulness of annual reports, hyper-investment caused by excess information put out by companies and the lack of auditing in quarterly reports.

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Despite this, "the research shows that while it’s easy to lump ‘investors’ under one roof, the reality is that different investors want different information from financial reporting," Willars concluded.