Corporate reports are weakened by their length
and complexity, according to a research by the Association of
Chartered Certified Accountants (ACCA).
The ACCA surveyed 500 users of financial
reports in the UK, US and Canada.
Reports are undermined by a lack of focus on
forward-facing plans and risk management, complexity, length and
too much ‘promotion material’, respondents said.
Nearly half of respondents of respondents said
annual reports were too long, 40% said they were too general and
35% said they were too backwards-looking.
Half of respondents admitted there is too much
PR talk and 26% said it was difficult to assess a company’s
performance. About 35% of the respondents said reports were too
complex with 68% of those blaming reporting standards and 61%
blaming legal requirements.
Additional information that could add value to
reports, according to stakeholders, is information about potential
risks that could affect a company’s performance (71%), how the
company plans to manage key risks (70%) and social and
environmental data (59%).
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Annual reports are still considered important
as half of respondents use them as their primary source of
information about a company.
“Annual reports can add real value for
businesses and investors but, as the survey shows, there are some
real issues in today’s reporting. Reports need to be simplified,
they need to be written with investors in mind, and they need to be
more forward-looking and evidently risk aware,” ACCA head of policy Ian