Write from the start: surveying narrative reporting in annual reports
Ad hoc addition of new rules has led to disordered reporting
Deloitte, the business advisory firm, has today launched the findings of its regular analysis of what companies are reporting in the narrative sections (parts outside the audited financial statements) of their annual reports.
Isobel Sharp, audit partner at Deloitte, comments: “The main message from this year’s survey is the realisation of how much the narrative reporting requirements have grown like topsy over the years. New requirements have been bolted on and new extensions will be added in 2008/9. The result is that the narrative sections of annual reports can have similarities with the famous Ronnie Corbett monologues, namely lots of diversions. Unfortunately new rules governing narrative reporting mean that this is unlikely to change in the future.”
The annual reports included in the survey were taken from all listed companies, the population of which was split into two categories being investment trusts, which make up 38% of listed companies, and other companies.
The main findings of the 2008 survey for companies other than investment trusts are:
Isobel Sharp continues: “Overall the results for the investment trusts were reasonably consistent with 2007, both for the average length of report and the ratio between narrative reporting and financial statements. In contrast to other companies in the survey, none of the investment trusts chose to adopt a formal OFR. However, all which fell under the relevant legislation included a responsibility statement.”
Deloitte will be publishing later in 2008 “Right to the end” which looks at the audited financial statements for the same companies surveyed in this report.
For more information, download our Write from the start - surveying narrative reporting in annual reports.
Notes to editors:
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country's leading professional services firms. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu ("DTT"), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other's acts or omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.