USA CFOs Believe Narrative Reports are Both Time Consuming and Costly to Produce

More Flexibility Needed Finds New Global Report From ACCA and Deloitte

LONDON, September 27, 2010 - The growing complexity of rules and standards is at risk of seriously
limiting the usefulness of narrative reporting, warns a major new global
report from ACCA (the Association of Chartered Certified Accountants)
(www.uk.accaglobal.com/) and Deloitte.
(www.deloitte.co.uk/about)

Hitting the notes, but what's the tune? collates the opinions of some 230
chief financial officers in listed companies across nine countries on the
current challenges and future shape of narrative reporting in annual reports.

The report finds that the divergent needs of shareholders and regulators
are leading to overly-complicated and compliance orientated reports.

Professor Isobel Sharp, Deloitte UK Audit partner, explains: "Companies
are trying to serve two masters at the same time. They want to inform
shareholders of what is happening in the business. They need to satisfy
regulators by meeting all the disclosure rules. To achieve succinctly and
simultaneously both outcomes in the same report is a major challenge."

Helen Brand, ACCA's chief executive says: "Even before the global
financial crisis, questions were being raised about the validity of current
corporate reporting. As our report finds, increasingly voluminous and complex
regulatory requirements are seeing the story of business performance drowned
out by a mountain of detail."

    Results from the USA show that:

    - A large majority (91%) of respondents consider shareholders
      to be a highly important audience for narrative reports but 72% also
      consider regulators an audience of high importance.
    - 88% of respondents consider legal and regulatory requirements and
      91% of respondents consider shareholders' requirements as important
      drivers for narrative disclosures.
    - A majority of respondents include an explanation of the financial
      results and financial position (100%), most important risks and their
      management (97%), and a description of the business model (88%) in
      their annual reports. While only 34% of respondents believe that
      shareholders consider corporate governance policies and procedures to
      be disclosures of high importance, 72% actually include this
      disclosure.
    - Since the financial crisis, most respondents claim that the
      disclosure of important risks and their management (81%) and
      explanations of financial results and positions (84%) have become of
      greater interest for shareholders.

Globally, the interviewees perceived the five most important disclosures
for shareholders to be: explanation of financial results and financial
position (identified as of high importance by 87%); identifying the most
important risks and their management (67%); an outline of future plans and
prospects (64%); a description of the business model (60%); and a description
of KPIs (58%).

The demands from regulators differ from those from shareholders. All nine
countries covered in the report demand remuneration reports (seen as of high
importance to shareholders by only 49% of preparers) and a statement of
compliance with corporate governance codes (46%).

Professor Isobel Sharp concludes: "We need to debate the future direction
of narrative reporting. Do we give preparers' more responsibility, or, do we
let the relevant authorities issue more rules for preparers to obey? Less
data may provide for better information."

Helen Brand concludes: "Today's reporting is meeting the data
requirements but is it information? Our results suggest not. Preparers seek
more discretion and less regulation."

Notes to Editors

1. About the report

A pdf of the report is here:
www.accaglobal.com/pubs/af/narrative/new/hitting_the_notes.pdf

The report is based on telephone interviews with 231 CFOs and group
finance directors from companies based in Australia, China, Kenya, Malaysia,
Singapore, Switzerland, the UAE, the UK, and the US in April and June.
Further in-depth interviews were carried out with 7 other CFOs from Kellogg
Company (US), Centum Investments Company Ltd (Kenya), Dubai Insurance Company
(UAE), Exco Resources (Australia), Straco Corporation (Singapore), Spirent
Communications plc (UK), and Time dotcom (Malaysia) and three representatives
from investor organisations (the Council of Institutional Investors (US), the
Association of British Insurers (UK) and the National Association of Pension
Funds (NAPF).

2. About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global
body for professional accountants. We aim to offer business-relevant,
first-choice qualifications to people of application, ability and ambition
around the world who seek a rewarding career in accountancy, finance and
management. We support our 140,000 members and 404,000 students in 170
countries, helping them to develop successful careers in accounting and
business, with the skills required by employers. We work through a network of
over 80 offices and centres and more than 8,000 Approved Employers worldwide,
who provide high standards of employee learning and development.

3. About Deloitte

In this press release references to Deloitte are references to Deloitte
LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche
Tohmatsu Limited ("DTTL"), a UK private company limited by guarantee, whose
member firms are legally separate and independent entities. Please see
www.deloitte.co.uk/about for a detailed description of the legal
structure of DTTL and its member firms.

The information contained in this press release is correct at the time of
going to press. For more information, please visit www.deloitte.co.uk.

Member of Deloitte Touche Tohmatsu Limited.

    For further information, please contact:

    Nick Cosgrove
    ACCA Global Press Office
    +44(0)20-7059-5989
    nick.cosgrove@accaglobal.com

    Laura Strong
    ACCA Global Press Office
    +44(0)20-7-462-8921
    lstrong@ruderfinn.co.uk

For further information, please contact: Nick Cosgrove, ACCA Global Press Office, +44(0)20-7059-5989, nick.cosgrove at accaglobal.com; Laura Strong, ACCA Global Press Office, +44(0)20-7-462-8921, lstrong at ruderfinn.co.uk