‘Big picture’ corporate reporting is lost without an OFR, says ACCA
The Chancellor’s decision to scrap the mandatory Operating and Financial Review (OFR) will mean companies will be under no obligation to provide important information for a variety of stakeholders says ACCA (the Association of Chartered Certified Accountants). ACCA disagrees with the government’s view that the Business Review is a suitable alternative.
In its response to the government on the future of narrative reporting, ACCA argues that companies should be given a formal option to publish an OFR. This would take advantage of the well-developed OFR reporting model provided by the Accounting Standard Board last year before the Chancellor’s abrupt turn-around on the mandatory OFR.
Allen Blewitt, ACCA Chief Executive, said: “While the Business Review should be kept as a minimum requirement for companies, it simply does not give equal prominence to the disclosure by companies of non-financial issues relevant to the development and performance of the business. Its demands are fairly limited whereas the OFR would give a comprehensive picture of the company’s objectives, achievements, prospects and risks, all in the context of its operating environment and stakeholder relationships. It is a much stronger document altogether.”
He added: “The government should retain the Business Review for minimum-level disclosures, but companies wishing to use the ASB’s excellent reporting statement and provide real ‘big picture’ social and environmental information on the drivers and influences material to their future should be given every encouragement to do so. The market will then make its mind up about companies’ relative reporting choices. The government says it is still supportive of forward-looking reporting – we believe by giving companies the OFR option it would be proving that.”
For further information please contact:
Ian Welch, Head of Corporate Communications 020 7059 5729/07739 862928 Helen Thompson, ACCA PR Manager 020 7059 5759/ 07725 498654