The International Accounting Standards Board (IASB) released highlights of a recent survey on financial information disclosures, ahead of its public discussion forum on ‘Disclosures in Financial Reporting’, and said respondents had identified various factors contributing to the disclosure problem.
The IASB received 225 responses from respondents across Africa, Asia, Europe and North America. Around 50% of responses came from financial statement preparers and around 20% came from users.
Highlights of the survey include:
- Over 80% of respondents agreed that improvements could be made to the way financial information is disclosed. Half of those respondents felt that such improvements were required across all parts of the annual report, and not just the financial statements.
- Most preparers of financial statements identified the primary problem as disclosure requirements being too extensive with not enough being done to exclude immaterial information; which has been referred to as disclosure overload.
- Many users of financial statements felt that preparers could do more to improve the communication of relevant information within the financial statements, rather than leaving users to sift through large amounts of data.
- A range of views on the underlying causes of the problem was identified. Some respondents felt that more could be done to improve the way in which accounting standards are set out. Others expressed concerns that preparers, auditors and regulators are approaching financial reporting as an exercise in compliance rather than as a means of communication.
Hans Hoogervorst, chairman of the IASB, said that feedback from the survey indicated a need for standard-setters, auditors, preparers, regulators and investors to work together in order to deliver vital improvements to all disclosures, not just those contained within the financial statements. “Our discussion forum on disclosures next week is the first step on that journey,” he added
The IASB Disclosure Forum will take place in London on 28 January. The event is open to the public and will also be webcast.
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