Finance & Accounting
Pages 5 (1255 words)
Do Annual Financial Reports have to be so lengthy and cluttered? October 26, 2012 1. Introduction Deloitte, one of the leading management accountancy and consultancy firms, says that company annual reports have grown in size and the average report has more than 101 pages.
At the minimum, the financial report must have the balance sheets, cash flow statements, profit and loss accounts, accounting policies and declarations, notes and annexures, director’s reports, operating and financial review and other such information necessary to understand the financial health of a company (Adelberg, 2012). Besides, as per the rules of regulatory authorities such as the IFRS and GAP standards, listed firms must publish the audited statement of accounts (ASB, 2009). A chartered accountant must qualify and audit these reports or, if the accounts are still under audit, an unaudited statement of accounts must be published (ASB, 2011). The annual report also provides an opportunity for the firm to highlight its achievements, speak about the plans, market share, its strategy and many other topics that the company wants to share with the public (Baker, 1992). Some other criticise this practice and they argue that such bulky reports often take the attention away from important and vital tasks of assessing the financial health of a firm(ACCA, 2012). This essay discusses the issue of excessive length of annual reports and analyses if such lengthy reports are really in need. 2. Reasons for Increase in Length of Finance Reports According to a recent report by Deloitte, many of the larger firms have reports that are more than 309 pages in length. ...