UK companies are calling for a simplification
of the financial reporting system, according to research by Baker

The survey, which questioned more than 200
companies, found 78% of businesses believe reducing “clutter” in
annual reports would not devalue them.

Financial reporting was considered a greater
concern for businesses than audit reforms being discussed in the UK
and Europe.

Respondents stressed regulations should be
tailored according to size, complexity and risks of the business
instead of a ‘one size fits all’ approach.

UK accounting rules on pensions, FRS17, came
under strong criticism, with respondents suggesting “the pension
figures turn the whole set of accounts into nonsense” and detailed
pensions disclosures were “undecipherable even by well informed

Baker Tilly said the survey showed solid
support for annual audits, with only a third of companies
suggesting it should be abolished. Four in ten respondents said the
main value of audit was to ensure good governance.

Nearly 60% of companies rejected the idea of
providing additional auditor commentary on financial statements
because it may bring additional costs and the subjective nature of
commentary could decrease the value of audit.

“We believe there is real value in what we do,
and our survey results highlight that businesses are aware that an
effective audit helps rather than hinders the management of a
company,” said Baker Tilly head of audit Jane Bleach.

“However, financial reporting appears to be a
far greater concern for businesses. We want to ensure that any
legislation is not damaging to our clients and UK businesses
generally and that is why we have written to Vince Cable’s office
with the results of our survey.”