Corporate reporting needs to take advantage of new technologies, according to ICAEW. In its report What next for corporate reporting: time to decide?, released today, the accountancy and finance body says that it’s time for policy makers to take a decision on how best to use IT to satisfy increasing demands for information.
Traditional paper-based reporting is still perceived by many as the principal form of communication. However, there are increasing demands for a range of information to be provided in corporate reports but at the same time, fears those reports are becoming too long and therefore less useful. ICAEW suggests that inclusion of digital and technology specialists in reporting discussions could highlight opportunities for companies to use technology in reporting as part of the solution to this problem.
Dr Nigel Sleigh-Johnson, Head of ICAEW’s Financial Reporting Faculty, said:
Stakeholders are demanding more information from companies, and companies seem willing to provide it. But there seems to be little progress in using technology as a reporting tool, which could solve this communication challenge. Demand for more access to information is likely to continue to grow, so it is important to address these problems as soon as possible
There is a real risk that the annual report becomes further overloaded with information in order to meet wider stakeholder demands, while making the report less useful for investors for economic decision making purposes. Presenting additional information outside of the annual report, in a digital format that is user-friendly and easy to access, may provide the answer to this. However, there needs to be further research into the implications of digitalisation. IT expertise would improve understanding of, for example, the potential in this context of two emerging technologies: data analytics and blockchain technology
In its new report, What’s next for corporate reporting: time to decide?, ICAEW captures the main features of vibrant discussions on the future of corporate reporting at a number of ICAEW roundtables and meetings. The importance of including technology specialists in meetings in order to discuss opportunities to meet the demands of the reporting process, as well as better collaboration between accounting and IT communities for the best results, was a common view heard during these discussions.
However, ICAEW warns that key policy decisions on issues such as this need to be taken if real progress is to be made in advancing the quality of corporate reporting. Either stakeholders make a concerted effort to accelerate and coordinate progress, with collaboration between technology specialists and those with an interest in better corporate reporting, or we accept that the pace of progress in the use of technology as a corporate reporting tool is likely to remain very slow.
It’s time to decide, in this and other areas highlighted in the report.