Regulating financial reporting on the Internet
| Date | 01 January 1998 |
| DOI | https://doi.org/10.1108/eb024952 |
| Published date | 01 January 1998 |
| Pages | 21-25 |
| Author | Roger Hussey,James Gulliford |
| Subject Matter | Accounting & finance |
Journal
of
Financial Regulation
and
Compliance
Volume
6
Number
1
Regulating financial reporting on the Internet
Roger Hussey and James Gulliford
Received: 29th September, 1997
Bristol
Business
School,
Frenchay
Campus,
Coldharbour
Lane,
Bristol
BS16 1QY; tel: 0117 965 6261;
fax: 0117 976 3851.
Roger Hussey is Deloitte and Touche Pro-
fessor of Financial Communications at
Bristol Business School and a member of
the Financial Reporting Committee of the
Institute of Chartered Accountants in Eng-
land and Wales. His research interests
include financial reporting to stakeholders,
the impact of the regulatory framework
and communication of financial informa-
tion.
James Gulliford is a Research Associate
at Bristol Business School. His research
interests include the impact of the Internet
on financial reporting and corporate
infor-
mation management.
ABSTRACT
This paper
questions
the
adequacy
of the
current
financial reporting regulatory system to deal
with
corporate
financial
information
disclosed
on
the Internet. The results of a research study
made on the FTSE 100
companies
Internet sites
are used to discuss company practices and the
issues arising. The paper outlines the key pro-
blems and
suggests
alternative
approaches
to reg-
ulating this new frontier for financial reporting.
INTRODUCTION
Corporate reporting is the process of com-
municating information, both financial and
non-financial, about the resources and per-
formance of the reporting entity.1 Tradi-
tionally, the printed document has been the
medium of communication in the form of
annual and half-yearly financial reports and
accounts. The emergence of the World
Wide Web as a medium for business com-
munication raises issues concerning the reg-
ulation of corporate financial reporting.
Not only are there problems associated
with applying current regulations for
printed documents to developing Internet
practices, but a paradigm shift will mean
that 'once the notion of computer-based
corporate reporting is accepted form and
content will be affected'.2
Companies such as Asda, British Petro-
leum (BP), British Telecom (BT) and
Dixons are making full disclosures on the
Web,
mirroring their published annual
report and accounts. Some companies also
disclose their unaudited interim statements
(eg General Accident, Imperial Tobacco,
ICI),
unaudited preliminary statements (eg
BOC,
Glaxo Wellcome, Vodafone), finan-
cial highlights (eg BSkyB, Zeneca, Schro-
ders),
summary statements (eg British
Steel, Rolls Royce) and other excerpts and
reports. The quality and accuracy of the
disclosures is open to question and it would
seem that the conventional regulatory fra-
mework is largely either being ignored or
is considered unnecessary.
Recent research conducted by the
authors indicates that 75 per cent of the
FTSE 100 listed companies in the UK now
have some form of Web presence. Of
those 75 companies using the Web, 52 of
them made some financial disclosures. The
remaining 23 companies use their sites
Journal of Financial Regulation
and Compliance, Vol. 6, No.
1,
1998, pp.
21-25
© Henry Stewart Publications,
1358-1988
Page
21
To continue reading
Request your trial