Latest EER survey insights just out
Interested parties are increasingly expecting more relevant and reliable non-financial information from extended external reporting (EER) but most listed companies are not providing it.
Users generally want more information than preparers currently are prepared to—or know how to—provide. Only 23 percent of the CFOs who responded to the survey were actually using an EER reporting framework. Moreover, a significant number of them are not even aware of the range of global EER frameworks currently available.
95% of users think it is important or very important to disclose information on strategies to achieve goals, compared to 63% of preparers. Only 42% of users consider this is well-reported.
XRB Chief Executive, Warren Allen, says: “The Users have spoken: Preparers need to rebalance their priorities to better serve the interest of multiple stakeholders (the Users). Focus on short-term financial returns to investors alone will sap growth and increase the cost of doing business.”
McGuinness Institute Chief Executive, Wendy McGuinness, says: “Further reporting on industry statistics enables comparability between companies and industries, and contributes to a deeper understanding of trends and risks over time."
"At the crux, Users are highlighting a demand for more relevant and reliable information. The question for discussion is how we develop a system that meets the needs of Users without adding layers of bureaucracy.”
Other related recent research
Last December we released a survey report Are financial reports meeting user needs? We wanted to understand the information and assurance needs of users of Tier 2 for-profit entity financial reports. We estimate there are currently more than 2,000 Tier 2 for-profit entities in New Zealand.
Users find Tier 2 financial statements useful and they trust them. However, users want to see financial reports continue to evolve and improve, and where possible to be shorter and simpler.
The full research reports on both reporting initiatives—together with report summaries—are available on our website.