Corporate Audit Reporting to Undergo Shake-up
: An initiative has been launched today to overhaul company accounts following frequent concerns that financial statements of companies do not provide an accurate picture of businesses and the risks each of them hold.
The new group is called The International Integrated Reporting Committee and it comprises of the top companies.
The Big 4, namely, Deloitte, Ernst& Young, Pricewaterhouse Coopers and KPMG, as well as big branded companies such as Nestle, EDF and Aviva, are part of the new group. Not-for-profit groups such as the Global Reporting Initiative as well as the UK 100 Group are also members.
The International Integrated Reporting Committee will scrutinize the value of governance, remuneration, commentary as well as environmental and social issues.
The move has come at the time when companies as well as investors are increasingly found to focus on issues such as the effect climate change and global warming have on company’s finances. For a number of years, concerns have been raised over the fact that financial statements reflect in an account into the previous year’s business dealings instead of forward-looking information.
The International Integrated Reporting Committee is planning to publish a framework later this year for a global integrated reporting model. The aim is to ensure that there is comparability in financial reports across borders. It will be presented to the members of the G20 next year.
Pricewaterhouse Cooper’s chairman and senior partner, Ian Powell said in an interview to the Financial Times that this step was an important one in the journey for the creation of a new corporate reporting model. He also said that this model is to be made fit for the 21st century.
Powell also said that the actions of the group “should be supported by all those involved in reporting”.