The ECIIA has welcomed the launch of a ‘fitness check’ consultation on the EU’s public reporting framework for companies.
The consultation will look at whether the framework is fit for purpose, is relevant for meeting the EU’s objectives and adds value at a European level. It will also consider specific aspects of the existing legislation as required by EU law and whether the framework is fit for the future and new challenges such as sustainability and digitalisation.
The Commission is seeking comments from the broadest possible base of stakeholders, in particular providers and users of financial and non-financial information, and the ECIIA says that internal auditors have a key part to play in highlighting any areas that are ripe for change.
“We very much welcome this wide-ranging review into modernising company reporting,” says Farid Aractingi, ECIIA president. “Internal auditors have had an increasing role to play in ensuring the accuracy of reported company data in recent years, and this unique oversight position gives them a crucial role in helping the EU ensure its framework does the job for which it’s intended.”
Europe’s company reporting regime has grown organically over the past 40 years to require broader and deeper levels of information, including recent initiatives to expand the level of non-financial reporting required from larger companies. These additional requirements cover relevant environmental and social information, as well as statements on board diversity.
The consultation asks respondents to rate how effective this diverse range of EU reporting requirements have been in supporting its objectives. Those include ensuring stakeholder protection, developing the internal market, promoting integrated EU capital markets, ensuring financial stability and promoting sustainability.
Looking to the future, it is also essential to consider whether the framework for public reporting is responsive enough to handle new ways of working. Respondents are asked to comment on the challenge of digitalisation and whether the framework takes into account the impact of technology in changing how companies prepare and disseminate corporate reports and the ways investors and the public access and analyse company information.
This fitness check is one of the actions announced in the action plan on financing sustainable growth that builds on the recommendations of the Commission’s High Level Expert Group (HLEG) on sustainable finance. Replies to the consultation will feed into a staff working document on the fitness of the EU framework for public reporting by companies, to be published in 2019.
Responses must be submitted via the online questionnaire. The consultation closes on July 21, 2018.