Date posted: 21/04/2020 2 min read

Report: The future of financial reporting

This important new report explores the reasons why Australia and New Zealand should embrace digital financial reporting.

In Brief

  • Digital financial reporting presents significant advantages for preparers, auditors, regulators, users and analysts
  • Through a unified labeling system, reports can be tailored to the needs of users
  • With simple access to detailed information, accountants can focus on advice and assurance

With major economies around the world adopting digital financial reporting, it is time for Australia and New Zealand to enter the 'digital age', according to a new paper from Chartered Accountants ANZ and Professor Peter Wells.

"Digital reporting assists users of financial reports to determine what information they require from financial reports and obtain that data in a format of their own choosing that will enhance their decision making."
External Reporting Board

What size do you want?

This report examines the ways in which digital reporting can reshape the way financial information is used. It explains how traditional reporting methods lack the flexibility to handle increasing volumes of data effectively, leading to unnecessary complexity.

Digital technology, and the XBRL framework in particular, addresses this challenge through a labelling system, called the IFRS Taxonomy.

By selecting relevant 'tabs' reports can be customised for specific purposes and tailored to maximise value for users with different skill sets.

Greater intelligence and transparency

The ability to search for and extract detailed data within digital reports enables in-depth analysis and advanced modelling.

This helps accountants to focus on data intelligence—rather than data preparation—and cements our role as analysts and advisers.

In a digital environment, automation technology can speed up processes and reduce errors, so reports are more current and accurate.

Financial decisions can be made with more certainty and transparency is enhanced for auditors, regulators and investors.

Focus on the future

In conclusion, Professor Wells notes that while financial reports have become more complex, any attempt to limit details contained in them would compromise transparency and undermine consistency.

The answer, he suggests, is more likely to reside in technology, which makes digital financial reporting an imperative.