Professional accountancy is not for wimps. Drawing on her many years of experience, Alison Thomas offers some light-hearted advice
This article was first published in the April 2018 UK edition of Accounting and Business magazine.
Q Does the imminent move to filing in XHTML mean the end of the PDF?
A Who comes up with these acronyms? Seriously, a dog let loose on a set of Scrabble tiles would come up with something more engaging.
Filing in XHTML (Extensible Hypertext Markup Language) is a big deal and all to do with the deliberations of the European Securities and Markets Authority (ESMA) over the European single electronic format. From 1 January 2020, a vast swathe of issuers in Europe will have to file their annual reports in XHTML – basically a combination of HTML and XBRL (Extensible Business Reporting Language).
This new requirement is already starting to raise a bunch of questions in reporting circles. How do boards sign off on HTML reports? What does this mean for audit? Or design? Some are also asking whether the move means the death knell for the much loved PDF.
It’ll be interesting to see the different reporting strategies that emerge. Will companies put all their efforts into XHTML filing and make it the focus of their efforts to communicate with investors? Or will they choose to file more of a compliance document, providing further detail to their stakeholders through different media? The second approach might even generate a whole new way of thinking about corporate communication. Social media is already widely used, but maybe we’ll see more videos or even the odd virtual-reality plant tour. Who knows?
To learn more about XHTML, a good place to start is the Financial Reporting Lab’s December 2017 report, Digital future of corporate reporting. There’ll also be further coverage of this topic in next month’s AB.
Q What do you think of the new no-frills annual reports that are creeping into the FTSE?
A I love to see experimentation in corporate reporting. We are great at moaning about the complexity, relevance and weight of annual reports, but typically we file doing something about it in the ‘too difficult’ basket.
The no-frills companies are the exceptions. They are pioneers who have the courage to question the old mantra of the glossier the better. That alone deserves a medal. But does their no-nonsense approach work? That depends in part on what the company is trying to achieve.
I can see a number of potentially winning no-frills strategies. For example, some may see the annual report as a compliance document that forms just one piece of a rich and increasingly tailored approach to communication. Others may decide that their shareholders are primarily professional investors who want a straightforward, business-like report. Both these approaches have merit.
But there is a danger: transparency-shy companies might use no-frills reporting as an excuse to get away with badly structured, bare-bones compliance documents, and nothing more.
Q Who would you say is the world’s most famous accountant?
A I guess the traditional answers would be Luca Pacioli, the ‘father of accounting’, or Josiah Wedgwood, who rather improbably managed to excel both as a potter and the creator of management accounting.
But in terms of universal recognition, neither really makes the grade. So perhaps accountant-turned-writer John Grisham, or accountant-turned-comedian Bob Newhart.
If I include wannabe accountants (those who dropped out to pursue less glamorous careers), then top of the list must be Mick Jagger, with Robert Plant and Eddie Izzard close runners-up.
Perhaps it is time to run a competition. Who among today’s accounting community deserves recognition? Nominations, please!
Alison Thomas is a consultant
"Transparency-shy companies might use no-frills reporting as an excuse to get away with bare-bones compliance documents"