On 6 April 2011, The Financial Reporting Council (FRC) published a discussion paper, Cutting Clutter, which focuses on ways in which companies, accountants, auditors and others can work on making reports are less complex and more focused on material information. This report is a follow-up piece from the FRC's Louder than Words report published in 2009.
The report focuses on three calls to action:
- encourage a debate about what materiality means in terms of disclosure
- investigate how to address long-standing explanatory material in reports
- engage with stakeholders and regulators to ensure that their information needs are met without adding more clutter to reports
The report also attempts to address behaviours, providing a short behavioural aid for teams involved in the production of annual reports. It also provides some disclosure aids, which suggests ways in which preparers can take steps now to cut clutter in reports, focusing on governance, accounting policies and share-based payments.
This project focuses on many points raised by the QCA Financial Reporting Committee in its campaign to explore using materiality as away to make reports less complex and more meaningful. The QCA Corporate Governance and Financial Reporting Committees will be jointly responding to this paper before the response date of 30 September 2011.