15 January 2007
CIMA (the Chartered Institute of Management Accountants) welcomes the ASB's (Accounting Standard Board's) review of narrative reporting practices amongst UK companies, launched today (see the website).
CIMA Chief Executive, Charles Tilley, says:
'Companies seeking to improve their narrative reporting practices will find this publication, with its examples and suggested actions, to be both informative and practical. I'm pleased to note that the ASB highlights issues which are key to CIMA, such as how to encourage forward-looking statements and the need to focus on key issues.'
The ASB states in its review that the disclosure of forward-looking information is both the most important and the most problematic area in narrative reporting. As an advocate of narrative reporting and forward-looking statements CIMA has contributed to the development of narrative reporting standards and guidance as well as to the new Companies Act and endorses the ASB's conclusion that applying the OFR Reporting Statement ensures companies both comply with legal requirements and benefit from the advantages that best disclosure practices bring.
CIMA is pleased to note that the ASB has included in its review the fact that, in preparation for the statutory OFR, CIMA sought and published a legal opinion from Allen & Overy LLP in order to assist Directors to reduce risks of liability when making forward-looking disclosures in good faith. Such protection was included in the Companies Act and CIMA shares the ASB's hope that these provisions will encourage the frank and transparent discussions from directors which distinguish the best disclosing companies.
The ASB's review also highlights the fact that companies have difficulty in deciding which of their risks and uncertainties merit disclosure, and suggests that they seek guidance from the OFR Reporting Statement. CIMA would also advise that companies refer to the model reports and account excerpts published under the Report Leadership initiative ' a group consisting of CIMA, PricewaterhouseCoopers, Radley Yeldar and Tomkins, aimed at illustrating practical ways to improve corporate reporting. The Strategy Progress Statement included in the example Generico report is particularly useful in providing a clear link between strategic priorities, key performance indicators and risk.
ENDS
For further information, please contact:
Katie Scott
Senior Press Officer, CIMA
+44 (0) 20 8849 2347
Katie.Scott@cimaglobal.com
Notes to editors
1. CIMA (the Chartered Institute of Management Accountants) is the only international accountancy body with a sole focus on business. It is a world leading professional institute that offers an internationally recognised qualification in management accountancy, focusing on accounting in business, in both the private and public sectors. CIMA is the voice of over 155,000 members and students in 158 countries and is responsible for the education and training of management accountants who work in industry, commerce and not-for-profit and has more members in the public sector than any other UK based body. CIMA prides itself on the commercial relevance of its syllabus, which is in tune with the activities of high performance organisations, and evolves continually to reflect the latest developments in global business. It is committed to upholding the highest ethical and professional standards of members and students, and to maintaining public confidence in management accountancy. For more information about CIMA, please visit www.cimaglobal.com.
2. CIMA was a supporter of the mandatory OFR and contributed to the development of the OFR standard published by the ASB.
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