The Financial Reporting Council Defines Complexity

1613 Words May 7th, 2015 7 Pages
The Financial Reporting Council defines complexity as ‘anything that makes regulations or the reports themselves unnecessarily difficult to understand, implement or analyse’ (Financial Reporting Council, 2009). Many areas of annual reports have been highlighted over the years as annual reports are seen to be getting more complex to both the users of accounts and the preparers. There have been many discussions as to whether annual reports are becoming more complex and harder to understand. An annual report is a detailed report for shareholders and other business partners on a company’s activities throughout the year. It is a legal requirement form the Companies Act 1985/9 that requires companies to publish their annual report and accounts. Its purpose is to present a true and fair view of the company’s annual performance, and provide financial statements that are useful to their users. There are many users such as creditors, shareholders, lenders, and existing or potential investors. The annual reports are intended to satisfy the reasonable expectations of the users and provide useful financial information (Leviticus and Media, n.d.). In order for the financial information to be useful the financial statements need to have relevance and be a faithful representation (Maynard, 2013, pp13). This means that the financial accounts should provide complete and relevant information to users, which is free from error as accurately as possible and is not in any way…
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