Narrative reporting – where do we go from here?

The government’s change of heart over the Operating & Financial Review has left many companies confused over whether to pursue the OFR on a voluntary basis or produce new Business Reviews. In this article, Richard Sharman, Head of Enterprise Risk Management at KPMG LLP, and Nicola Collins, Audit Committee Institute at KPMG LLP, explain the recent history of reporting requirements and how the two reviews compare.

Voluntary OFR, mandatory OFR back to voluntary OFR and perhaps soon to be mandatory OFR again? Who could have predicted such a debacle back in July 2003 when the government announced its intention of requiring certain businesses to produce Operating and Financial Reviews (OFRs). This announcement followed the work of the Company Law Review and the 2002 White Paper “Modernising Company Law”, which supported the OFR as a way of improving the disclosure of information by companies.