Notes to the Financial Statements - Spin ?

Rusty Cogs 08

I'm currently researching the whole area of financial statement narrative commentaries. How they can be used and abused by the company to throw out spin or marketing. Would anyone have any comments or links regarding this ?

Cheers

TiGeR KiNgS

The auditor should have something to say if the f/s's moved away from giving a 'true and fair view'.

Plus, who actually reads the notes from outside the company?

Rusty Cogs 08

Well there are a number of reports in the notes which the auditor generally doesn't comment on such as the Chairman's statement or social responsibility reports. The question is, are these ancillary reports a help to giving a fuller picture to the state of the company or just a lot of marketing fluff that has no place in a set of regulated accounts. ?

LightningBolt

I think you'd find a chairman's statement and social responsibility reports within an annual report which would also contain the financial statements. They wouldn't make up the actual notes to the FS as they'd be irrelevant.

Rusty Cogs 08

Point taken and my mistake, it's not the notes I'm actually thinking off but the non or quasi regulated narrative that companies include along with the FS. I've amended my original post accordingly.

tenchi-fan

Rusty Cogs 08 wrote: »

I'm currently researching the whole area of financial statement narrative commentaries. How they can be used and abused by the company to throw out spin or marketing. Would anyone have any comments or links regarding this ?

Cheers

Read the standard paragraph titled "respective responsibilities of directors and auditors" in the auditors report:


We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises only the Directors’ report and business review, the unaudited part of the Directors’ Remuneration Report, the Chairman’s Statement, the Chief Executive’s Statement, the Chief Financial Officer’s report and the Corporate Governance Statement. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.