In its paper, Accountancy Europe introduces nine criteria and applies them to four approaches to interconnected standard setting for corporate reporting. Accountancy Europe sets out its vision and offers ideas on progress towards a global corporate reporting structure.
Global risks and opportunities mean that financial information alone cannot give a full picture of a company’s performance. Climate change, environmental degradation, social unrest and internally generated intangibles are addressed by non-financial information (NFI) reporting. However, the hundreds of NFI reporting initiatives available are leading to confusion and the potential for greenwashing. For an effective response to these global issues and stakeholder demands, NFI reporting needs to be harmonised and interconnected with financial reporting.
The paper introduces nine criteria to assess approaches to interconnected standard-setting for corporate reporting. The criteria are:
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urgency,
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global or local solution,
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oversight,
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due process of standard-setting,
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responding to stakeholder interests,
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framework and metrics,
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materiality lens,
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legal embedding, and
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role of technology.
These criteria are then applied to four approaches, being (1) an international non-financial reporting standards board within the IFRS structures, (2) regional consolidation, (3) separate governance structure for financial and NFI reporting; and (4) global corporate reporting structure.
Comments on the paper are invited by 31 March 2020.
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Full paper on Accountancy Europe
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