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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
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 study IFAC member bodies and associates have compared the issues and recommendations of the March 2008 report with the current regulatory developments in their respective countries. The study among 74 IFAC member bodies from 58 different countries, including all major economies, shows:
- Regulatory progress in many areas of governance, reporting, auditing and usefulness of financial reports;
- Many institute actions in areas of governance, reporting, auditing and usefulness of financial reports; and
- A number of remaining issues that provide opportunities for IFAC and member bodies for further action.
The results of this study were presented by Charles Tilley, chair of the project group at the annual IFAC Council meeting, November 12-13, 2008 in Rome. A copy of his presentation can be found here.
Phase 2
The next step in this project will be a series of interviews with investors, preparers, auditors, standard setters and regulators from around the globe on the right things to do to make business reporting more useful.
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.
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Key Contacts
Vincent Tophoff, Technical Manager (vincenttophoff@ifac.org)
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