Show me more than the money

An assessment of how prepared companies are for the business review

November 2006

With the Companies Act having received Royal Assent, we are now in a position to better understand the overall shape of information which will be required under the final business review regulations. We therefore hope you will find the contents of this publication useful as you consider the implications of this announcement on your reporting.

With the requirements of the original business review regulations and best practice recommendations from the Accounting Standards Board (ASB) Reporting Statement: Operating and Financial Review as a guide, we looked at a random sample of annual reports from over 120 quoted companies with the objective of understanding if, and how, the requirements and recommendations would have an impact on company reporting.

Although the survey focused on the reporting of companies for the year prior to the regulations coming into effect, the inclusion of a small sample of March year-end companies, who have already reported under the original requirements, provides an initial insight into the impact of the legislation.

The most significant findings of the survey were that the majority of companies provide information about their competitive environment and an indication of strategy, despite this not being a regulatory requirement, and that there has been a marked improvement in the quality of reporting since the arrival of the legislation. At the same time, however, almost half of companies assessed are failing to get the basics right by not providing a description of their KPI’s or principle risks and uncertainties, which are an explicit requirement of the business review.

To download your free copy of the survey and more information please visit www.ofrnow.com.