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Two of Australia’s top accounting associations are urging the Albanese government to bring company reporting into the 21st century and mandate digital reporting as recommended by a parliamentary committee in February 2020.

An interim report into the regulation of auditing in Australia conducted by the Parliamentary Joint Committee on Corporations and Financial Services recommended digital reporting be mandated to make it easier for analysts, creditors, academics and other stakeholders to use financial reports of companies.

Digital reporting would allow analysts, creditors, academics and even shareholders to speedily find the data they are most interested in, rather than work their way through annual reports in portable document files (PDFs) or traditional paper formats.

Two-and-a-half years have passed since the recommendation was made and the failure to act on that proposal is proving to be an irritation for the accounting profession.

CPA Australia spokesperson Dr Jane Rennie tells SmartCompany the federal government should mandate the move to digital because Australia is in the “dark ages” of financial reporting.

Rennie says there have been no digital financial reports lodged with the corporate regulator over the past decade since a voluntary digital reporting scheme was established.

“We want the Corporations Act to be amended to require listed companies to lodge digital financial reports. The Parliamentary Joint Committee Report on the Regulation of Auditing in Australia suggested the government take steps to make digital reports standard practice,” she said.

“Until digital financial reporting is made mandatory, Australia will remain behind its international peers in financial reporting best practice. Among the G20, most have already implemented mandatory digital financial reporting. In the US, digital financial reporting has been standard practice since 2009.”

Chartered Accountants — Australia and New Zealand spokesman Amir Ghandar tells SmartCompany that a recent investor confidence survey completed by CAANZ found that 70% of the more than 1000 investors surveyed supported a move to digital financial reporting as a way of boosting comprehension of financial reports.

That survey also revealed that 77% of respondents found financial reports difficult to understand, with 86% of respondents believing that customised digital financial reporting would help access to financial information of companies.

Ghandar says it is important the government prioritise this change as recommended by the parliamentary committee in February 2020.

CAAP Consulting principal Colin Parker — a long-time expert in financial reporting and auditing — agrees it is critical that Australian financial reporting be modernised as it is in other countries.

“Let’s get financial reporting into this century and get away from pen and quills,” Parker told SmartCompany.

Article Credited to Tom Ravlic, SmartCompany

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