The FRC has published a discussion paper, A Matter of Principles: The Future of Corporate Reporting.
The discussion paper explores ideas for fundamental changes to the corporate reporting framework in the UK, to make it more effective and engaging for a company’s stakeholders. It asks whether the traditional concept of the annual report remains fit for purpose, given the increasing importance of non-financial information and the digital channels available to companies to engage with their stakeholders.
The paper proposes a completely new approach to corporate reporting, replacing the current annual report with a network of interconnected reports. The network of reports would be centred around a “business review”, which would effectively be a more concise version of the current strategic report. The financial statements would be a separate standalone report. The network would also include a “public interest report”, which would be a broader, stakeholder-focused report.
The paper also discusses the opportunities available to improve the accessibility of corporate reporting through the use of technology.
The FRC says that these proposals are consistent with the themes in the Kingman Review and the Brydon Review (see our blog post at the time) on audit reform.
The FRC seeks comments on the discussion paper by 5 February 2021.