by Daniel Mather for CFO World, May 2011.
Corporate reporting structures as they stand amount to a system at risk and in need of significant change, a new report claims.
Unless evolution is properly achieved, corporate reporting might become unfit for purpose and fail to provide investors and other users with comprehensive information, say PwC, the Chartered Institute of Management Accountants (CIMA) and think tank Tomorrow’s Company.
Serious discussions and substantive change need to be achieved to save the system at what the report describes as a “critical point” for the future of corporate reporting. The risk of leaving the reporting framework, founded during the Industrial Revolution, largely unchanged means the whole system could redundant.
Tony Manwaring, CEO of Tomorrow’s Company, said: “We have come to terms with the short-term thinking and silo decision-making which did so much to cause the financial crisis. Corporate reporting must also come to terms with these challenges, to make the step-change needed so that it is fit for purpose during the global recovery and beyond.
“To be effective, reporting must not only provide an integrated account of what is material, drawing on financial and non-financial data – tomorrow’s corporate reporting must fully reflect the needs of the whole system of which it is part, and all the key players and institutions who bring the system to life.” (continue reading… )