Stephen Taub, CFO.com | US
November 7, 2006

An excellent idea

Having gone through the development from annual to quarterly and even monthly reporting, it strikes me that the main obstacle to frequent reporting is the attempt to discretise the evolution of business data into ever smaller time units. In essence, we are now treating monthly data in the same way as we treated annual data before. Like the Little Prince on the accelerating planet.

Real-time reporting will require a great deal of work to get started. But once we have made the necessary investment in models and presentation forms, we will be relieved of a lot of the repetitive drudgery that short-term accounting generates.

Posted by Walther Neuhaus | Nov 10, 2006 10:17 AM ET

Several more steps before the vision becomes reality

The big four accountancy firms are right to set out a new vision for business reporting and call for 21st century financial reporting, but many will see this is a colossal task.

While issues do currently exist in global accountancy policy that must be addressed, the industry has to first define a framework of best practice measures that will allow companies to prepare for the delivery of real-time reporting in a sustainable way.

Many businesses, for example, still need to make significant changes to improve performance management processes and identify key value drivers internally, let alone externally. Integrated technologies exist that can improve the time it takes to close, plan and forecast and critically benchmark performance against peers ? ultimately delivering secure, trustworthy and auditable business reporting to key stakeholders in an interactive manner.

This is, admittedly, only a step in the right direction. But by embracing best practice throughout the business companies will create an environment for broader change and do so in a way they can manage and sustain. The accounting firms shouldn?t expect financial models to change over night ? it?s going to take several more steps before the vision becomes reality.

James Fisher, Cartesis

Posted by James Fisher | Nov 9, 2006 2:53 AM ET

Real time reporting...maybe

I remain skeptical of the accounting and finance profession to have the level of workflow processes, and more importantly, the removal of attitudinal boundaries that exists, to provide real time (or relatively real time) operating metrics and financial reporting. Accountants and finance professionals have always tended to work incrementally, meaning, they have always tended towards a bifurcation in their workflow thinking: They process work, they build forecasts and models, they make journal entries and adjustments, they make accruals....and then they go back and review it all at "x" date (end of month, end of week, end of whenever). Old habits die hard.

Posted by Brian Watt | Nov 8, 2006 2:06 PM ET

Big 4 Focus Should Be on Now Given the Problems

Conceptually who would disagree with the benefits of timeliness and transparency? Probably not very many.
From a practical standpoint, it would behoove the Big 4 to focus on where we are at now, fixing their conservative approach to SOX for example and enhancing their client service capability.
The fact is, when one considers the SEC, private industry professionals and the Big 4, the Big 4 are probably the least progressive and most reactive of the bunch.
My preference at this point would be for the Big 4 to spend the majority of their time in Paris focused on basic business, like being responsive to managing client services and fees rather than visioning sessions on real-time reporting. The Big 4 cannot effectively meet its client service and investor needs right now, and the type of real-time reporting under discussion will be more difficult forthe Big 4 firms to handle. Better work on the present before sending too much time envisioning the future. The envisioning is the easy part.

Posted by W. Kelly Rice | Nov 8, 2006 12:41 PM ET

Big Four Eyes End to Quarterlies: Report

It's helpful to know a date or timeframe for a potential recommended change.

Posted by Melissa Loughan | Nov 8, 2006 10:02 AM ET

Not a marketing ploy nor a pipe dream

This is neither a marketing ploy by the Big 4 nor a pipe dream. The SEC has been pounding the table for XBRL for at least 6 years, providing ample warning to companies that they should be preparing for data feeds allowing investors access to data tagged figures. With the SEC's recent moves (note recent contract awards) to enhance their system capabilities and the fact 24 firms had already been volunteering to participate in XBRL, the notion of real time reporting is not only real but will happen in the mid-term future (5 years perhaps, give or take a year?).
From the auditing perspective, this will place more emphasis on the controls testing around each company's system support, testing which should be encompassed in current audit plans. I think the Big 4 would argue further testing would be required (I don't necessarily disagree with this), and yes, this would mean more time spent and more fees, but presumably this increase would also be offset by efficiencies gained from less transactional testing.

Posted by Ron Joas | Nov 8, 2006 7:59 AM ET

We will see it sooner than later

I'm only 36. I will see it. Sure.

Posted by Bernardino Madera Narvaez | Nov 8, 2006 6:57 AM ET

How can reporting be "real time" when so many struggle once a year?

Although the model summarised in the article sounds attractive it is very difficult to see how global companies and their auditors will ever achieve this. We shouldn't forget that in countries like the UK, quarterly reporting is not yet a reality for most listed companies and our recent research of the world's largest 150 companies revealed an average elapsed time to announce year end results of 40 days and an elapsed 60 days to get an audit signature. Somewhat distant from real time results!

Posted by David Jones | Nov 7, 2006 7:25 PM ET

Sounds like a marketing ploy

The Big 4's suggestion that traditional quarterly reports be eliminated and other, more user- friendly performance-based information be provided, sounds like they're working on improving their revenue stream rather than improving the quality of user-friendly financial results.

Posted by Monica Bastien | Nov 7, 2006 6:58 PM ET