Institute calls for assurance over narrative reporting
Accountants may have to sign off all of a client’s annual report, including details about its strategy, “human capital” and environmental impact, an ICAEW report has suggested.
The extended assurance from an auditor could mean proposals to make financial reporting more comprehensive and useful takes off.
Some experts say that annual reports have got bigger but less useful. There is too much focus on the past year’s performance and not enough on the future, giving a narrow view of a company’s performance, it is also claimed.
The failure of the big accounting firms to warn of the collapse of banks during the financial crisis is also given as another reason to change the information companies publish about their performance and the remit of auditors.
Readers of annual reports may...