Let’s get digital, Australia!
We enjoyed a recent Accountants Daily article from Simon Grant of Chartered Accountants Australia and New Zealand (CA ANZ) on the need to advance digital reporting in Australia. “Imagine a world where annual reports easily provided the information a reader was looking for,” he urges, a need that is only increasing as reports get longer and more complex.
“There is a solution to this and it’s not necessarily the reduction of content, but the presentation of it. It’s time for Australia to take a leap into the 21st century and embrace digital reporting,” he says. Using the internationally recognised digital reporting language – i.e., XBRL – means that “investors can consume the information how it suits their needs — easy to find, easy to use, and easy to compare and analyse key numbers. This is tailored, efficient, and once you get past the PDF mindset, not particularly hard.”
The great majority of investors say that digital reporting would improve their ability to access financial information, and that current reporting is failing to provide them with decision-useful information. Australia’s parliamentary joint committee inquiry into the regulation of audit recommended digital reporting as best practice, but though commonplace in many major markets it remains voluntary in Australia. Companies have little incentive to modernise, and early adopters “will find limited value if digital is not adopted collectively across the market with a common data store, enabling consistency, and attracting service providers with the tools for investors to make the most of the data.”
Change is needed, “not just because transparency is best practice, but because if the companies in other markets are doing it, it quickly becomes an issue of competition. Some say it is just a matter of time before our resistance to improving annual reporting impacts the attractiveness of our capital markets, compared to others.”
“The fundamental purpose of the annual report is to provide investors with a clear view from which they can make their decisions,” concludes Grant. “A wholehearted embrace of digital reporting will keep Australian companies competitive and will give investors the information they need to navigate the tricky global economy right now.” Hear, hear!
Read more here.