Financial reporting, whether for internal or public consumption forms the bedrock of the finance function and is often the primary and most visible measure of the finance function’s professional competence and standing. But new research “The Future of Financial Reporting Survey 2017” released today by the FSN Modern Finance Forum suggests that the financial reporting process is teetering under the strain of new information demands, a spreadsheet-spiral™, a fragile reporting ecosystem and consequent problems in boardroom.
Only 3% of survey respondents weren’t losing sleep over their reporting processes or deadlines, and 7% only worried about one aspect of the process. Which means 90% were worrying about at least two financial reporting concerns, and in some cases the worries were actually part of a larger pool of misgivings and process failures indicative of a malaise in their entire financial reporting system.
Meeting deadlines is the top worry amongst senior finance professionals, affecting 62% of survey respondents, indicating that the time pressure evident with an increasingly diverse and strategic workload remains an issue even where financial reporting comes in.
Coming fifth on a list of six nightly worries is this: “will an unexpected error be discovered in a critical spreadsheet.” Nearly 46% of senior finance professionals agreed or strongly agreed that this worry kept them up at night. On its own this may look a simple anxiety, however, it was strongly correlated with a series of further concerns or shortfalls indicating lax controls, inefficiencies in data collection, a lack of agility in the reporting process, and a lack of understanding of which spreadsheets were critical in the first place. This is followed closely by process concerns, with 55% worried about whether financial controls are working and whether all documents and disclosures reflect the most up-to-date changes to the accounts.
The research was conducted amongst the 49,000 members of the FSN Modern Finance Forum on Linkedin globally and represents one of the largest and most authoritative global surveys of its kind.
A series of infographics released from today depicts some of the highlights of the research and will form the foundation of discussion in the FSN Modern Finance Forum in Linkedin during the next few months. The full research will be released at a reception and dinner at the Shangri-La Hotel, at the Shard in London on 10th May 2017.
977 senior finance professionals responded to the survey covering 23 countries and 13 industry sectors. Approximately half of the respondents were from organisations with more than 1,000 employees.