Практика МСФЗ 27 липня, 2020

«That would be best done by the IFRS Foundation»

In May, ACCA published an extremely interesting report «Insights into integrated reporting 4.0: The story so far», which analyzed the integrated reports of 48 of the world's leading companies. The author of this report is Richard Martin, Head of Corporate Reporting, ACCA, who has made a critical diagnosis of the current state of the integrated reporting system. On June 10, ACCA released Richard Martin's comments on the need to radically update the EU Directive on Non-Financial Reporting (NFRD). In particular, it was pointed out the need to create a principle-based standard for non-financial reporting,  and introducing external assurance of non-financial data.
We are glad that Richard Martin kindly agreed to explain some matters for our readers.



  Richard Martin, Head of Corporate Reporting, ACCA


ACCA  asks for "bold approach" to the review of NFRD, and you suppose that external assurance over the NFR should be mandatory. The additional burden on business in times of crisis may not be approved by the professional community. Is your proposal a strategic long-term one?

R. M.:  Our proposal is a strategic one because changing EU law is for the long term. Our view is that both the financial statements and the further information that would be in the management report are important for investors and others and that logically both should be subject to independent assurance. Already many listed companies are choosing that on a voluntary basis and the current Directive left to member states the possibility of making it mandatory. We think that EU law can now move ahead and require assurance of the management report in addition to the audit of the financial statements. However we recognise there are some practical difficulties and significant cost in providing the assurance and so to minimise them we have proposed that it should be at a limited level rather than reasonable.

Your report confirms that companies use various non-financial standardization bases ( Framework, GRI, TCFD, SDGs). Do you think the Oxford Union idea of one global non-financial standard is hopeless?

R. M.:  I attended that debate in Oxford. I agree with the idea of one global standard for non-financial reporting and in our view that would be best done by the IFRS Foundation as proposed in the Accountancy Europe cogito paper of December 2019. As part of this revision of the NFRD the EU seem likely to set up a non-financial reporting standard setter. We hope that would be or become a global one.

In your opinion, is the Framework  suitable to be the basis for a single European standard of non-financial reporting?

R. M.:  Very much so. The Framework provides guiding principles and a structure for reporting which looks at the business’ performance and prospects as a whole covering both financial and non-financial aspects. It is used by many large organisations around the world already. Its principles and structure could be reflected in the law or in a framework within which the more detailed standards could be developed.

№ 7, 2020  (с. 20)
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