Calls for clearer reporting

News Article - Tuesday, October 02, 2007

filed under: Regulatory

Investors have called for greater "clarity and simplification" regarding financial reporting.

A new study published by accountancy firm KPMG discovered that accounting is becoming an increasingly "regulatory" business, although reports themselves are lacking any real depth or insight into the machinations of an enterprise as a result.

Three-quarters of investors who responded to the firm's study said they would like more clarification regarding exceptions, while the same proportion called for more information on the assumptions made by reports.

Richard Bennison, head of audit at KPMG, said that a good balance must be maintained between "accessible and useful" insight and achieving the various requirements imposed by regulation.

"I hope that the principles-based approach on which UK accounting is founded will continue to be strongly embedded - otherwise there is the danger that we will see financial statements becoming more and more complex and opaque," he added.

Earlier this week the Institute of Chartered Accountants of Scotland described ethical auditing as a double-edged sword, offering risks and benefits.

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