Can we change financial reporting for ever?

I think over time, the Annual Report has become a dumping ground for company bound legislation of varying sorts – in the same way really, that over history (until 2006 Companies Act) the Company Secretary became the legal dog for legislation.

If one stands back, I think the Annual Report should now be divided into three:

1. The financial reporting for the historic period. This is the basic reporting stuff and the piece subject to audit. The more than can be taken out (by law and convention) the more useful it will be as a record of what has occurred.
2. A prospective report. Investors, potential suppliers and customers all really want to understand how the company sees its future and how it envisages assembling and using its resources to get there. This I see as an unaudited document but not unlike a prospectus though with rather more detail, and one that can be updated as news events occur in the company and not doggedly tied to the company’s reporting date. It will almost certainly reside on the company’s website
3. The compliance report. Another unaudited, updated , web-site dwelling living document, where the company maintains its approach to compliance and regulation, its green and other credentials, its ownership statement (in terms of subsidiaries and interests in other companies), it’s public risk statements etc. Again, given the content is dynamic, it should not have a reporting timeline, though obviously for transparency a preparation date on each piece would help interpretation

Okay – so all a bit financial, but what do you think?