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Do Annual Financial Reports have to be so lengthy and cluttered? - Essay Example
Finance & Accounting
Pages 5 (1255 words)
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. These reports are supposed to provide a comprehensive view about the significant activities of a firm for the preceding year…
According to a recent report by Deloitte, many of the larger firms have reports that are more than 309 pages in length. Companies disclose their business risks, the key performance indicators, and these disclosures are in response to the EU Transparency Obligations Directive. A few areas that lead to clutter are immaterial disclosures, needless explanations that prevent the reader from understanding important information. Other areas for clutter are long explanations given as declarations and footnotes that do not change every year. Other examples are detailed notes online items, share-based payments and so on. These are included more as behavioural influence from the previous years. Accountants fear comments from regulatory agencies that the reports do not disclose all the required information and hence they include a number of declarations and narrations about even minor items. Other areas that lead to excess clutter is information on corporate social responsibility, deferred tax, directors’ report and statutory information, financial instruments, intangibles, principal subsidies, movement tables, post-retirement benefits, principal risks and remuneration report. ...
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