Company reports are obscuring the facts when it comes to business performance and risk according to a recent report by ICAS.

The volume and level of disclosure detail in corporate annual reports is obscuring essential business information and risk data, according to the Institute of Chartered Accountants of Scotland (ICAS).

The accounting body put forward this view in a submission to the Financial Crisis Advisory Group recently, a panel set up by the International Accounting Standards Board and its US counterpart, the Financial Accounting Standards Board to consider the standard setting implications of the global financial crisis.

“ICAS strongly believes that accounting has not caused the economic crisis and should not become a scapegoat for failures in decision-making”, said Hugh Shields, chief economic adviser at ICAS.

“The main role of accounting, and its value to users of financial reporting, is that economic reality is reflected at all times – in this regard the current length and complexity of annual reports is not helpful”.

The organisation also said that corporate reports do not tell a ‘clear story’ about the performance of a business and that investors and others often face a ‘Herculean task’ to piece together the relevant information in order to make an informed judgement of corporate performance.