Commenting on the publication today of the ICAEW’s report The Journey looking at narrative reporting in annual reports.
David Matthews, partner at KPMG, said: “It is surely an anomaly that some of the information most valued by investors is subject to the least scrutiny. We welcome the ICAEW’s report on this important area.
“Regulation could be introduced to mandate greater assurance over the front end of annual reports, but regulation can be a blunt tool if not wielded carefully. We would rather see a demand-driven solution – it’s time for investors and stakeholders to tell us what would give them the greatest value.
“If companies are prepared to make the investment to improve the transparency and quality of narrative reporting and the robustness of the processes that generate it, it is reasonable to expect auditors to make that journey with them, providing assurance over the output to investors. I believe that this is achievable. We are ready to play our part.
“If we are serious about restoring trust in corporate reporting, then greater assurance over front end statements is surely a vital element in making that happen.”
KPMG has recently launched a new initiative, Restoring Trust, to debate ways of improving corporate reporting and making it more fit for the modern marketplace. Further details are available at www.kpmg.com/uk/corporatereporting
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.