Sustainability is likely to be a major focus for the next wave of corporate reporting reform for the European Commission, according to speakers at a recent Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG Fisma) conference.
“Sustainability is the issue of the day and will impact reporting for sure in terms of IFRS and the promotion of a sustainable economy,” John Berrigan, deputy director general of DG Fisma, said. The European Corporate Reporting Lab was created this year to help to identify best practices for non-financial reporting, he said.
Berrigan added that the review would look at making corporate reporting more efficient and that technology would be a key driver for creating better access to a wide range of stakeholders.
These themes were picked up in a panel discussion at the event.Oliver Boutellis-Taft, CEO Accountancy Europe, Marina Brogi, Professor in the department of management at Sapienza University of Rome, Karim Hajjar, CFO at the materials company Solvay and V. Willems of SG SME Unitedsaid that while reform was needed, any changes should not endanger what had already been achieved.
They also noted that the difference between financial and non-financial reporting information was not as clear cut as it used to be, which made the case for integrated thinking and reporting stronger. A further panel discussion explored the opportunities that digitalisation could bring to corporate reporting.
“Management needs to put a system in pace to create such non-financial data,” the panel concluded. “These processes can be checked by the auditors and the audit regulators need to ensure it can be measured.”
Internal auditors have a clear role to play in providing assurance that the data collated by such systems is comprehensive and accurate.
“An organisation’s ability to report effectively on the social, economic and environmental impacts is dependent on its management system’s reliability,” Farid Aractingi ECIIA President said. “Internal audit is in a unique position to provide assurance those systems are delivering information that both the organisation and its various stakeholders can have confidence in.”
Read ECIIA’s notes from the conference