MORE discretion and less regulation is needed when auditors deliver financial commentary at the front of annual reports, according to a raft of chief financial officers (CFOs) at large commercial companies.
A new report published by Deloitte and the Association of Chartered Certified Accountants (ACCA) found that over 65 per cent of some 230 CFOs interviewed said they would like a reporting environment with more discretion and less regulation.
Almost 60 per cent said there should be an emphasis on forward looking information in narrative reporting found at the front of annual accounts.
Meanwhile, meeting legal and regulatory requirements were the most important drivers for narrative disclosures, according to 83 per cent of CFOs, while meeting the needs of shareholders came marginally below this at 82 per cent.
Isobel Sharp, Deloitte audit partner, said: “Companies are trying to serve two masters at the same time. They want to inform shareholders of what is happening in the business. They need to satisfy regulators by meeting all the disclosure rules. To achieve both is a major challenge.”