Non-Financial Reporting Considered Inadequate by Companies, ACCA Survey
Non-financial information has been reportedly being used by companies are considered inadequate for the investors. In a recently conducted survey by the Association of Chartered Certified Accountants (ACCA) gathered feedback from investors on their use of non-financial information.
Whilst investors believe that companies should lay more focus on the disclosure of non-financial information, in this regard companies must prioritize the value of information which is provided to them. All aspects such as linkage to business strategy, risk and financial information must be given more importance by the companies and the information must be valued.
European Commission has published set of amendments to European accounting legislation this April. The major requirement set by European Commission in their proposed amendments is to make all companies such as the larger ones that they must share additional information on social and environmental issues with the European Commission.
It has been believed that larger companies would share the information on certain matters such as environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on the boards of directors. In this way, larger companies will put forth information about their policies, risks and results.
Commission staff prepared Impact Assessment in an executive summary which stated that stakeholders have growing demands for non-financial transparency and in this regard the larger European union companies fail to live up to the demands of the stakeholders. In terms of both quantity and quality, the prepared Impact Assessment summary noted that stakeholders such as investors, shareholders, employees and civil society organizations are disappointment by the larger EU organizations not fulfilling their growing demands.
Association of Chartered Certified Accountants (ACCA) survey revealed that investors are flexible with integrated reports which would include reporting of non-financial information alongside financial information. It has been noted that ACCA survey results extensively support this view.
Non-financial information importance has been growing over the years according to the valuable sources such as Sustainability/Corporate Social Responsibility (CSR) reports and annual report. Also, such information is being used where ever necessary. They survey highlighted the growing importance and use of such information by the companies.