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Length and content for company reports
CFA UK surveyed members for their views on the length and content of company reports in September.
The survey was undertaken to support the Financial Reporting Council’s project on the utility of reports.
The survey generated a small response rate (just 32 members taking part), but was evenly split between buyside and sellside analyst responses and provided some useful insights into the areas of reports that analysts value highly and those that are regarded as less important.
Most respondents indicate that annual reports and preliminary announcements are about the right length and provide the right amount of information in most areas.
However, analysts are eager to see more information provided on two areas in the financial statements: the financial instruments risk note and the segmented information note.
Within the survey, members were invited to provide their own comments on possible improvements to annual reporting. Respondents called for ‘clearer language, ‘less unjustified optimism and more realism’, ‘more timely’ reports and better information on ‘the direction of the profit margin’.
Our survey contained bad news for company chairmen – the chairmen’s statement being regarded as too long by a healthy minority of respondents – but good news for chief executives. 42% of respondents would like to see more information in the chief executive’s report.
17 October 2008