Time to declutter annual reports, says accounting rule setter

June 28, 2013 Leave a comment

Time to declutter annual reports, says accounting rule setter

7:52am EDT

LONDON, June 27 (Reuters) – A global accounting standard setter has pledged a bonfire of the boilerplates to rid annual company reports of unnecessary disclosures that confuse investors.

Hans Hoogervorst, chairman of the International Accounting Standards Board (IASB), said book-keeping rules will be changed to cut swathes through irrelevant sections of ballooning annual statements.“The risk is that annual reports become simply compliance documents, rather than instruments of communication,” Hoogervorst said in a speech in Amsterdam on Thursday.

The 2012 annual report of HSBC runs to 546 pages, pipping RBS at 543 pages, with Barclays at a more modest 226 pages.

Since the financial crisis, regulators have been under pressure to shed light on the accounts of banks in particular. Hoogervorst set out a plan to ditch disclosures that are not “material”, with new guidance to define what is relevant.

The medium-term aim is a new disclosure framework for the IASB’s accounting rules, used in more than 100 countries, including in the European Union.

Britain’s Financial Reporting Council, which regulates accounting, has ticked off companies for listing every conceivable risk, making it hard to spot the important details.

The ACCA, a London-based accounting body, said a study it conducted with accounting firm Deloitte found the average length of annual reports of UK-listed companies rose by 56 percent between 1996 and 2010.

Hoogervorst, a former Dutch finance minister and markets supervisor, said even his “quick win” changes will have a big impact and remove most excuses for boilerplate disclosures.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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