How to tell your story with excellent financial reporting

Leaders in financial reporting combine clear language and ironclad data with innovation in form and format. Here is what the Awards of Excellence in Corporate Reporting recognized as top tier in 2016.

Financial reporters, when it comes down to it, are storytellers: they are telling the story of a company using a combination of clear, objective language and comprehensive, incontrovertible data. When you’ve finished reading their financial report, you should have little doubt where that company stands—or where it’s going.

A company’s annual report highlights the past year’s results within the context of corporate strategies, competitive strengths and industry fundamentals. Leaders in financial reporting remain true to the foundation of transparency and accountability while exploring innovative ways to help readers understand key information.

Once again, PotashCorp>— our winner in 2016 — demonstrates why it is a recognized Canadian leader in this field. Its financial reports tell an organized and complete story: the information is balanced and comprehensive, while strategy is clearly linked to performance. Our honourable mention, Intact Financial Corporation, also impressed judges with the clarity and specificity of its disclosures.

5 ways to stand out in financial reporting

Here are five key tips to help you stand out in financial reporting:

1. Draw attention to the most significant data first.
The sheer volume of financial and other data in corporate reports is overwhelming. Think about the information your reader will value the most. Emphasize the most significant and relevant information first and layer in more detailed information based on relevance and importance. Open with a succinct executive summary and organize subsequent information in such a way that additional details can be easily found.

2. Make the narrative more accessible and understandable.
Dense and wordy narratives do little to communicate effectively with current and potential investors. Tables, bullets, charts and graphics help make the information easier to capture and help readers understand trends and future plans.

3. Replace technical and obscure terminology with clear and concise language.
Clear language trumps verbose and ambiguous wording every time. Scrub each story for industry jargon and overly technical descriptions. While it’s challenging to pare reporting back to its essence, the upfront investment in time—to edit and curate information—is worthwhile.

4. Align the narrative and reports to avoid apparent inconsistencies or contradictions.
This is particularly important when matching disclosure on corporate objectives and strategies with performance. Scorecard information that is forthcoming and insightful impresses judges – and more importantly, investors.

5. Judiciously cross reference.
Help the reader connect the dots. Truly effective disclosures cut out repetitions and redundancies, and make intelligent use of cross references (parenthetical explanations that communicate direct relationships between assets and liabilities).

In search of inspiration? Check out the companies that won awards in this category in 2016.

For more information on this and other categories, check out the 2016 Judges’ Book for profiles on last year’s winners.

Entries for the 2017 Awards of Excellence in Corporate Reporting are open May 1 – June 30.

About the Author

Ron Salole

Ron is a Fellow of the Institute of Chartered Accountants in England and Wales, retired vice-president, Standards, CPA Canada and former deputy chair of the International Public Sector Accounting Standards Board. A self-professed enthusiast of corporate reporting, Ron assumed the role of head judge of the awards program in 2016. He also lends his considerable expertise as the lead judge, Financial Reporting. Ron also serves as a member of the International Auditing and Assurance Standards Board and is a member of the Board of Directors at CCAF-FCVI Inc., a Canadian research and education foundation focused on strengthening public sector accountability by promoting effective performance auditing and oversight of government operations.

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Entering CPA Canada’s Awards of Excellence in Corporate Reporting is simple. Submit your 2016 corporate reporting materials online.