Financial Reporting Supply Chain

High quality financial reports lie at the heart of strong capital markets and sustainable economic growth. All those involved in the financial reporting supply chain play a critical role in the quality and reliability of economic information. To facilitate understanding of these roles and the areas requiring changes, IFAC has undertaken several studies.

Financial Reporting Supply Chain - March 2008 Report

To ascertain the state of financial reporting globally, in 2007 IFAC commissioned an independent study on the financial reporting supply chain, chaired by Norman Lyle. The study focused on whether or not financial reporting has improved in recent years and whether or not it is now more relevant, reliable and understandable. In March 2008, the results of the study were released in a report entitled Financial Reporting Supply Chain: Current Perspectives and Directions.

The Supply Chain

As part of the study, more than 340 participants took part in an online survey and interviews were conducted to obtain input from those in every segment of the financial reporting supply chain: professional accountants, company executives and senior-level management, boards of directors, audit committees, external auditors, standard setters, regulators, financial analysts, investment bankers, lawyers, credit rating agencies, investors, and others.

Report Overview

The report explored the areas of corporate governance, the financial reporting process, the audit of financial reports and their usefulness by examining the people and processes involved in the preparation, approval, audit, analysis and use of financial reports. It uncovered areas where significant improvements in the financial reporting process have been made and areas where there is a need for continued work.

Report Contents

The full report can be downloaded, or it can be viewed by clicking on the sections below.

• Introduction
• Summary of Key Findings
• Survey Methodology
• Corporate Governance
• Financial Reporting Process
• Audit of Financial Reports
• Usefulness of Financial Reports
• Conclusion
• Appendices
  • Appendix A: Online Survey Results
  • Appendix B: People Interviewed for this Survey
  • Appendix C: Other Relevant Publications
  • Appendix D: Credibility Report: Recommendations and Results

IFAC welcomes feedback on all sections of the report.

Business-Reporting Project (initiated July 2008 and ongoing)

The March 2008 financial reporting supply chain report concluded that despite the many improvements made in the reporting process, there is still much work to do to meet the needs of investors and other respective stakeholders. As a result, the IFAC Board commenced a new business-reporting project in July 2008 to help advance the recommendations in the March 2008 report.

Phase 1

In a new survey currently underway, IFAC member bodies and associates are comparing the issues and recommendations of the March 2008 report with the current developments in their respective countries. The results of this new survey will help IFAC offer specific proposals on which the various participants in the financial reporting supply chain may take action.

Phase 2

Scheduled to begin during the fourth quarter of 2008, the second part of this new business-reporting project is an interview series with users, preparers and auditors of reports centered on the question: “What constitutes a good business report?”

Phase 3

The project will culminate in the development of international good practice guidance (IGPG) to assist accountants in preparing high quality, relevant business reports.

Key Contacts

Vincent Tophoff, Technical Manager (vincenttophoff@ifac.org)