The Financial Reporting Council (FRC) has released a discussion paper proposing a future for corporate reporting based on a principles-based framework. It outlines a blueprint for a more agile approach to corporate reporting which challenges existing thinking about how companies can more effectively meet the information needs of investors and other stakeholders.
ACCA welcomes the opportunity to provide views in response to the Financial Reporting Council’s discussion paper, A Matter of Principles: The Future of Corporate Reporting. This has been done with the assistance of members of ACCA’s Global Forum for Corporate Reporting.
We agree that there is a need for the corporate reporting system to evolve from meeting the perceived needs of a single set of primary users (investors), to addressing the information needs of a wider group of stakeholders. In this context, we welcome the FRC’s aim of placing non-financial reporting on a similar statutory footing as financial reporting.
However, we would urge the FRC to consider the implications of the proposals in the paper on audit and assurance, because this is an important matter of public interest. If the assurability of information is not sufficiently considered from the outset, there is a significant risk that the audit expectations gap may widen, thus further damaging public trust in corporate reporting. This is particularly problematic given the current diversity in how practice assurance engagements are performed on non-financial information.
To read the response in full, please download the consultation response document.