Financial reporting update: Risk management, management commentary, and more
Here’s a roundup of recent developments in the financial reporting world.
The Financial Reporting Council Lab has highlighted improvements companies have made in risk management practice since the financial crisis in a new report. The report notes that boards have a much clearer view of strategic risk and have improved their oversight in recent years. However, there is still some way to go before companies are fully aligned with investors’ demands in this area. The report also highlights the usefulness of UK viability statements in fostering discussion on the future direction of the company.
New initiative on management commentary
The International Accounting Standards Board has announced that it will review its guidance on management commentary for the first time since 2010. The issue has grown increasingly important as the development of nonfinancial reporting has taken hold in Europe over recent years.
New collaboration on integrated reporting
The International Auditing and Assurance Standards Board and the World Business Council have launched an initiative to assess how sustainability is being addressed in reporting across the globe. The initiative is an opportunity to look at the impact of standards on sustainability.
Wider than financial reporting
The Non-Financial Reporting Directive, published in 2014, aimed to ensure that corporate reporting was broadened. Three years on, Accountancy Europe has sponsored a report that looks into how it has been implemented across member states of the EU.
David Hackett is technical policy manager at the Association of International Certified Professional Accountants.