AT THIS JUNCTURE, CONSIDER Developments in New Reporting Models, published by the Institute of Chartered Accountants in England and Wales at the end of 2009 and available at www.iasplus.com/uk/0912newreportingmodels.pdf. This publication looks at calls for a new reporting model, for both financial and non-financial reporting. It argues that business reporting must adjust to reflect changes in business, in information technology and in users' needs. Naturally, this is a perpetual process. Yet business reporting is best viewed not in terms of models but as a complex social institution, one which constantly evolves in response to changes in its environment.
Market forces, regulation, ethical and emulatory motives, as well as pressure from participants in public debate, all push business reporting to adapt to changing circumstances. The debate about the future of business reporting therefore needs to be reframed, and not as a stark choice between an old model and a new one but in terms of the need for continuing evolutionary improvements.
The contents of this 109-page publication are as follows:
Tables and research findings
Executive summary
The challenge
Summary
Calls for reform
Business reporting and reporting models
Delivery and access
Criticisms of ‘the current model'
Changing criticisms
Rhetoric and reality
Different societies, different reporting practices
Structure of the report
Financial reporting fundamentals
Summary
Criticisms of ‘the financial reporting model'
Inherent limitations: is financial reporting useful?
Financial reporting: the strengths of its limitations
Accountingfor intangibles
Summary
Relevance of the question
The charges
The historical perspective
Is financial reporting misleading investors about intangibles?
Intangibles: income v the balance sheet
Putting all intangibles on the balance sheet
Difficulties in the debate on intangibles
Improving financial reporting for intangibles
Financial reporting and the financial crisis
Summary
Past and future work
Current value accounting: a broken model?
Historical cost accounting: a broken model
Recognition and disclosure problems
Non-financial reporting
Summary
Is there a non-financial reporting model?
The case for a non-financial reporting model
Problems with a non-financial reporting model
A comprehensive model
Greenhouse gases: measurement and reporting
Mapping users' information needs
Success drivers and business models
The development of business reporting
Summary
An evolving institution
The wider context
Business reporting as a market activity
An ethical endeavour
A source of emulation and prestige
A regulated activity
Recent changes in the market for information
Systemic issues
Reasons for optimism
Length and complexity
Summary
The problem
Possible solutions
The way forward
Summary
The rhetoric of public debate
Reframing the debate
The importance of research
Appendix 1: Proposals discussed in New Reporting Models for Business
The Balanced Scorecard
The Jenkins Report
Tomorrow's Company
The 21st Century Annual Report
The Inevitable Change
Inside Out
Value Dynamics
GRI
The Brookings Institution
Value Reporting
The Hermes Principles
Appendix 2: Recent developments
Significant contributions to the debate
Significant developments in practice
Inquiries into complexity
Appendix 3: Six underlying questions
Can business reporting meet all decision-making needs?
Can business reporting benefit from a new conceptual framework?
Can business reporting depend on the invisible hand?
Can business reporting attach values to all intangibles?
Can business reporting achieve transparency?
Can business reporting serve multiple stakeholders?