The topics discussed were:
- Current use of financial reporting by investors
- Interactions between financial reporting and long-term investment
- Giving directions for, and assessing, financial reporting standards
- Confidence in financial reporting
- Influence on standard setting
Throughout the discussions and topics covered, the EFFAS Chairman, Jesús López Zaballos, was pleased to hear that non-financial information was also viewed as important by the other panellists. Since 2007, EFFAS has had an Environmental, Social and Governance (ESG) Commission as well as a Financial Accounting Commission. The ESG Commission is doing important work on non-financial reporting and EFFAS has recently held a first conference with colleagues in Brazil on said issue. Key Performance Indicators on ESG issues were now being used to create indices so EFFAS has discussed these ESG issues with the European Commission and have created a training and qualification programme on ESG for analysts. EFFAS is also interested on how such information can be included in traditional financial reporting and could make a contribution in this respect.
About financial statements being still the main source of financial information for users, our Chairman indicated that the financial statements are the main source of financial information for users, although other sources exist as roadshows, press releases and discussions with management. The role of financial statements has changed due to technology and the way in which users access information has also evolved. As an example, EFFAS used to hold joint meetings with companies, but new technology means such meetings are now organized much less frequently than in the past.
On the importance to have users involved early in the standard-setting process, our Chairman reported that one of the criticisms EFFAS had to face in the past was that they were asked too late in the standard-setting process. It is crucial to use European organisations having direct contacts with users to get their views on proposals and in this sens, organizations like EFFAS could be instrumental in enhancing the contacts with them.
Finally, on SMEs needing additional help in providing good financial reporting, the Chairman reported on his experienceswith SMEs: he was frequently asked what information to provide were good for companies listed on alternative investment markets. Said companies were frequently not covered by any analysts, which created an additional barrier in obtaining finance. In some countries, EFFAS members have created a special group of financial analysts together with stock exchanges to help smaller listed companies structure their financial reporting.