Accountants call for rethink of unwieldy company reports

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The Independent Online
Company reports should be radically overhauled so that they provide more information in a more concise way, according to two leading firms of accountants.

In a survey of listed companies' annual reports published today, Arthur Andersen found "considerable overlap" in accounts. It also noted "a paucity of forward-looking information". Meanwhile, KPMG found that Britain's biggest quoted companies were putting so much information into their preliminary announcements that the full accounts were losing their relevance.

Philip Randall, managing partner of Arthur Andersen's UK audit and business advisory unit, said: "The best annual reports are notable for the quality of information not the quantity of financial data included. There must be scope for cutting down on giving essentially the same information in two places."

The firm points out that the growth in disclosures that has made annual reports average 44 pages, with some well over 100, is a result of more rules being set by increasing numbers of bodies.

Recent years have seen the Greenbury and Cadbury Committees and the Accounting Standards Board as well as company law changes having an impact on what is included.

It is likely that the Hampel Committee (successor to Cadbury), the Auditing Practices Board and the National Association of Pension Funds as well as the ASB` will influence future additions to annual accounts.

Arthur Andersen believes that - since many disclosures are not essential for a "true and fair" view to be given - they could be dropped from the statutory financial statements, but made publicly available through a filing with the Stock Exchange, in much the same way as in the United States.