Corporate reporting bridges the gap between companies and investors

The demand for corporate reporting to be more transparent is a reality. Dictated by the key role it plays in telling investors the story of value creation, corporate reporting is a way for companies to gain the trust of themselves and other stakeholders.

Promoting this transparent approach requires a broader shift in attitudes towards a balance of financial (eg, turnover, profit, loss, etc.) and non-financial (eg number of innovation processes, sustainability indicators). The latter should be as credible and reliable as the financial data. However, there are two main challenges facing finance department leaders when developing an approach based on trust in non-financial data.

The first challenge is the ability to extract value from non-financial data, while managing any associated risks, including confidentiality and respect for data protection.

The second challenge is the reliability, objectivity, and credibility of the data behind non-financial reporting, especially when technologies such as robotic process automation (RPA) and artificial intelligence (AI) are used in data collection and analysis.

To gain confidence in data analysis, the following two aspects are important:

2. Implement advanced tools for data capture and analysis – RPA can support imposed and time-consuming tasks to be performed more effectively and efficiently, and AI can provide a new depth of perspective for reporting. However, it will take longer for most financial teams to move beyond isolated pilot projects and start tackling these technologies on a large scale.
3. Trust that the information resulting from the analysis of data performed by advanced systems is accurate and reliable – Many of today’s financial systems have a certain level of trust and assurance built into them, yet AI does not enjoy the same level of trust. Most finance leaders express concerns about the quality of data produced by AI and the associated risks.

Promoting this more transparent approach to reporting requires, in turn, changes not only in terms of methodologies and practices but also in the mindsets and culture of the company.

The organizational culture will play an increasingly important role in corporate reporting in two ways: first, as financial teams play a central role in conducting transparent reporting, they create an open and responsible culture that responds to rapidly changing reporting requirements.

Second, by providing investors and stakeholders with a meaningful, credible, and relevant, data-driven perspective on the organization’s performance and culture, the company demonstrates the link between the company culture and its performance in value creation.

There are three areas of action that are likely to be key to stimulating a culture of openness and accountability in corporate reporting:

1. Emphasis on a sound approach to a company-wide reporting culture
2. The talent mix required to stimulate the change of financial culture and overcome resistance
3. Building trust and ethics regarding the use of support technologies (RPA and AI)

Companies can respond to the need for transparency expressed by investors by adopting a new organizational culture of corporate reporting and mindsets about the information they share with investors and stakeholders.

By creating reports that include financial and non-financial indicators to gain stakeholder confidence, by building a company-wide reporting culture, and by building trust in data analytics with advanced technologies, companies help increase confidence in the business environment.

Florentina Șușnea

Florentina Șușnea este Managing Partner în cadrul companiei PKF Finconta. Experiența ei profesională de peste 26 de ani cuprinde domeniile de audit statutar și IFRS, consultanță fiscală, probleme de rezidență fiscală, restructurare financiară și fiscală, documentație și politici de Transfer Pricing, fuziuni și divizări, M&A, expertize judiciare, contabile și fiscale, due diligence de achiziții. Florentina este membru acreditat al următoarelor organizații profesionale: Camera Consultantilor Fiscali, Camera Auditorilor Financiari din România, Camera Expertilor și Contabililor Autorizați din România si Association of Certified Anti-Money Laundering Specialists. A absolvit Facultatea Finanțe-Contabilitate din cadrul Academiei de Studii Economice, București, Facultatea de Drept din cadrul Universității ”Titu Maiorescu”, programul MBA de la Tiffin University din SUA, este doctor în economie și a urmat numeroase cursuri naționale și internaționale în domeniul fiscal. florentina.susnea@pkffinconta.ro