The UK’s Financial Reporting Council (FRC) has called for companies to publish searchable, online-only versions of their annual reports.
This is part of the accounting watchdog’s recommendations for companies to improve accessibility to annual reports for investors. It presented its proposals in its ‘Effective Company Stewardship: Enhancing Corporate Reporting and Audit’ report.
“The FRC believes that the annual report and accounts to be posted on a company’s website, rather than produced in print,” it said in its proposals.
As a general recommendation, the FRC said that companies should “take advantage of technological developments to increase the accessibility of the annual report”.
It said that accessibility would be improved if companies to provide access to annual reports and accounts online in a form that can be searched quickly and easily.
This may be through the use of eXtensible Business Reporting Language (XBRL), according to Jonathan Labrey, head of communications at FRC. XBRL is a tagging system that enables stakeholders to search for specific information in an annual report more quickly.
“Increasingly, data can be better manipulated. What investors want is more useful information, and they’re getting that, but that has led to a cluttering of annual reports. They’re very long.
“We want to reflect electronic developments, for example, people read reports on iPads,” he explained.
Furthermore, improvements could also be made if companies are “relieved of the burden” of producing annual reports on paper. The FRC said the old method was “draining” the resources that companies could be using to develop better ways of producing reports.
In developing its proposals, which also include ways to achieve higher quality narrative reporting on business strategy and risk management, the FRC said in its report that it will consult on whether they should apply to all listed companies, to those in the FTSE 350, or to some other grouping.
The FRC is calling for responses to its proposals by 31 March 2011.