A survey by EY’s Financial Accounting and Advisory Services (FAAS) found that many chief financial officers (CFOs) are losing confidence in corporate reporting.

Problems that are hindering the effectiveness of corporate reporting include:

• pressure from audit committees;
• complexity of implementing new reporting requirements;
• the volume and pace of big data;
• complexity of local and international compliance requirements; and
• reporting overload.

Just 55 per cent of the 1,000 global CFOS surveyed said they are confident in the degree of compliance, compared with 84 per cent last year. The CFOs worked in 25 different countries in companies with revenue greater than US$500m.

The survey – titled 'Are you prepared for corporate reporting’s perfect storm?' – found that 48 per cent of CFOs said that their reporting was effective in securing the confidence of the board, down from 71 per cent last year.

However, one-third of CFOs (32 per cent) agreed that meeting the needs of the audit committee and supervisory boards is the most critical factor in driving the importance of effective reporting.

Only 43 per cent of CFOs said that their reporting was effective in meeting the expectations of those outside their organisation.

“Corporate reporting needs to be all things to all people – relevant, timely and cost effective,” commented EY's Peter Wollmert. “CFOs need to step back and evaluate what they are producing and address concerns over confidence and effectiveness quickly. To delay means that the timeliness and accuracy of reporting will continue to affect performance. Corporate reporting will only serve its intended purpose if the CFO is confident of its value.”

Innovative technologies and big data key to reporting success

However, 82 per cent of CFOs expected to increase investment in reporting technologies over the next two years, with 20 per cent planning to increase technology investment in reporting technologies by 20 per cent.

A further 84 per cent of respondents said that audit committees and boards have increased their overall attention on reporting in the past three years, with 34 per cent saying that the attention has increased significantly.

Complexity and demand for reporting increases as confidence in its effectiveness decreases