Bin the clutter

Which of the following observations was not one observed by the Financial Reporting Council in the UK as regards 'clutter' in annual reports?

The barriers to reducing clutter are mainly behavioural

There should be continued debate about what materiality means from a disclosure perspective

There is substantial scope for segregating standing data, either to a separate section of the annual report (an appendix) or to the company`s web site

Disclosures are unhelpful and should not be provided

Which of the following is not a reason as to why annual reports should only contain relevant and necessary information?

It is important for the efficient operation of the capital markets

To minimise the tax payable

Users can assess the opportunities, risks and constraints that the entity faces

Users can find what they are looking for and gain an understanding of the company`s business

Which of the following is a significant cause of 'clutter' in annual reports?

The fact that different parties require differing disclosures for the same matter

Company law which conflicts with accounting standards

Local regulators with the same audience

SEC rules have to be complied with

How can the 'clutter' in small and mid-cap companies be reduced?

By using a strict compliance approach

By using a rules based approach

By using the IFRS for SMEs

By using a proportionate approach

What can be the result of SME's being forced to comply with extensive regulations regarding disclosure of activities?

A rules-based disclosure approach

Defensive reporting such as repeating information from the previous year

Disclosing only material items

Aggressive reporting

There are behavioural barriers to reducing 'clutter'. Which of the following behavioural characteristics is unlikely to be a barrier to reducing 'clutter'

The threat of future litigation may out weigh any benefits to be obtained from eliminating catch-all disclosures

Preparers of annual reports are likely to include more detailed disclosures than are strictly necessary to avoid challenge from auditors and regulators

The threat of criticism or litigation could be a considerable limitation on the ability to cut clutter

Companies are likely to comply with IFRS for fear of the annual report being incomprehensible

Explanatory information may not change from year to year but it nonetheless remains necessary to an understanding of certain aspects of the report. What is the main disadvantage of disclosing increasingly more information in an appendix to the annual report?

Readers may not understand the information

Readers may be disadvantaged by having to hunt in the small print for what remains key to a full understanding of the report

It contravenes corporate governance laws

Readers may forget to look for the information

Which of the following accounting concepts is seen as the driving force of disclosure?

Materiality

Substance over form

Reliability

Relevance

IAS 1, Presentation of Financial Statements, deals with the general principles of disclosure under IFRS. What does IAS1 require in terms of disclosure in annual reports?

Disclosure of any matter, which has a material or immaterial effect on the entity

Disclosure of significant accounting policies

Disclosure of all judgements made by the entity

Disclosure of anything that might affect the share price of the entity

Which of the following actions could reduce some of the unnecessary clutter in annual reports and still ensure fair presentation?

By not requiring the disclosure of IFRS in issue but not yet effective

By allowing entities to use local standards instead of IFRS where necessary

By allowing entities to not disclose information that they feel is not relevant

By allowing local versions of IFRS

Which of the following observations was not one observed by the Financial Reporting Council in the UK as regards 'clutter' in annual reports?

Which of the following is not a reason as to why annual reports should only contain relevant and necessary information?

Which of the following is a significant cause of 'clutter' in annual reports?

How can the 'clutter' in small and mid-cap companies be reduced?

What can be the result of SME's being forced to comply with extensive regulations regarding disclosure of activities?

There are behavioural barriers to reducing 'clutter'. Which of the following behavioural characteristics is unlikely to be a barrier to reducing 'clutter'

Explanatory information may not change from year to year but it nonetheless remains necessary to an understanding of certain aspects of the report. What is the main disadvantage of disclosing increasingly more information in an appendix to the annual report?

Which of the following accounting concepts is seen as the driving force of disclosure?

IAS 1, Presentation of Financial Statements, deals with the general principles of disclosure under IFRS. What does IAS1 require in terms of disclosure in annual reports?

Which of the following actions could reduce some of the unnecessary clutter in annual reports and still ensure fair presentation?

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