The coalition of businesses, regulators, accountants, stock exchanges and NGOs launched an initiative to revise the standards for international financial reporting in order to prevent a new financial crisis, writes Financial Times. The crisis raises many questions about how to rely on corporate statements. Annual reports and financial statements of banks have been particularly criticized for not having warned investors about the risks that companies take. International Integrated Reporting Committee, using the accumulated discontent as a result of the crisis, wants to make a radical change in financial reporting. The proposed new reporting model will consider not only the company’s financial position, but will also include comments on leadership, corporate policy, payment, and issues related to environmental and social responsibility. Investors focus increasingly on issues such as the impact that could have climate change on the finances of a company. Among participants in the initiative are Nestlé, Aviva, EDF, HSBC, Tata, big four auditing companies PwC, Deloitte, Ernst & Young and KPMG, a number of universities, including Harvard Business School, and influential non-governmental organizations such as Global Reporting Initiative and Accounting for Sustainability Initiative.
It is crucial to the support of International Accounting Standards Board and U.S. Financial Accounting Standards Board, which sets rules for financial reporting in the U.S. and International Organization of Securities Commissions, which develops international standards for regulation of financial markets. The coalition wants to publish an integrated framework for global financial reporting model that will allow easy comparison of financial statements from different countries this year. The framework will be presented to the G20 in 2011. G20 have already supported the idea of establishing uniform rules for financial reporting and support of the G20 is considered crucial for their application.