Deloitte: Annual reports shrink 3%
Annual reports have shrunk 3% due to more succinct narrative disclosures, says Deloitte
ANNUAL REPORTS have shrunk by 3%, the first time their length has dropped in 15 years.
Deloitte examined 130 corporates and investment trusts, and found most of the reductions were made in the narrative front half of annual reports, with back-end financial statements unchanged.
Senior technical audit partner Isobel Sharp said: “Given the complexities of company reporting, it was good to see even a modest decline. But annual reports are still 123% longer than when we began our surveys in 1996.”
Report preparers were particularly responsive to Financial Reporting Council advice on going concern and liquidity risk, with 76% adopting their guidance.
However, Sharp (pictured) said more can be done to cut the weight of bulging annual reports, and was recently involved in a study that found financial statements could be shortened by 30%.
International standard setters the IASB are also examining the issue, and recently received a study on reducing disclosures in financial reporting.
“While these are promising developments, it is questionable whether these will merely manage the problem, as opposed to curing the illness,” Sharp concluded.
