Extract from the Cornerstone Journal of Sustainable Finance & Banking, January 2014 written by Janet Pegg, Head of Accounting & Valuation at Cornerstone Capital Inc. and former Managing Director and Analyst of U.S. Accounting Research at UBS Investment Bank. Janet is an II-ranked Analyst. Subscribers can view the full article in the January edition.
Although mandates for more disclosure were for valid reasons, the result can be financial reports that are often complex and convoluted. This makes the investor’s task of digesting the information difficult. A concern, is that the complexity of full financial reports results has investors stopping their analysis at earnings releases and bypassing the full Form 10-Ks and 10-Qs. It is important, therefore, for investors to use their voice and let regulators and standard setters know what they need to understand a company’s performance and also its prospects for the future. And in assessing the required information, care must be given to consider not only the current environment, but also other potential scenarios and circumstances.