What should I do after the ACCA

IAS plus

In April, the EU Commission proposed changes to the accounting guidelines that would require certain large companies to provide additional information on social and environmental issues. In future, the affected companies would have to disclose their principles, risks and results with regard to environmental, social and employee issues, respect for human rights, the fight against corruption and bribery and diversity in management and control bodies.

The summary of the Impact Assessment prepared by the Commission's staff stated: "The majority of large companies in the EU fail to respond to the growing demand from stakeholders (including investors, shareholders, employees and civil society organizations) for transparency as well in terms of non-financial issues. " This applies both in a quantitative and in a qualitative sense.

The recently published ACCA study supports this conclusion. It follows on from two previous studies that indicated that investors are open to the concept of integrated reporting. With integrated reporting, annual financial statements would be interlinked with non-financial information.

The recently published study emphasizes the growing importance of non-financial information that investors currently obtain mainly from the following sources: sustainability reports, social responsibility reports and management reports. The majority (67%) of the participants in the study, which was conducted among investors and analysts from November 2012 to April 2013 and responded to the 90 responses, stated that they always consider non-financial information when it is available.

Further results of the study were:

  • The majority (78%) of the respondents felt that the non-financial information currently provided is insufficient.
  • 73% complained that the non-financial information was not related to corporate strategy and risk management, and 93% said that it was not currently possible to assess the materiality of the non-financial information.
  • 92% were of the opinion that there is currently little comparability of this information across companies and also suggested that further information such as corporate governance and information on the supply chain could be made available.
  • It was also said that management should be held more accountable for non-financial information and that this information should be confirmed at the general meeting.

The (more visually) results of the study are available on the ACCA website: What do investors expect from non-financial reporting?