Abstract:
The volume of non-audited information released by companies is extensive, and
growing. This information has the power to move the share price. However, there
are few regulations concerning this information, and practices differ widely.
The tone of such information is often as important as the underlying content. A
hierarchy of oversight is necessary. Not all of the information disclosed should
or could be reviewed by non executives. Companies have to determine the
significance of each statement and judge whether it is a matter for Board
review, for delegation to the audit committee, or for the executive management.
The Board should confirm that appropriate processes are in place to ensure the
probity of the disclosures. Narrative disclosures in the financial statements
are generally reviewed in some detail by the Board and the audit committee. The
preliminary statement of results is reviewed by either the Board or the audit
committee, or both. Particular attention is paid to the tone and outlook of this
document. The level of review of interim statements by audit committees varies
between companies. The level of audit committee or non executive involvement in
the pre-close statement also differs significantly between companies. Practices
regarding investor/analyst presentations vary. In a few companies the non
executives see both the slides and the scripts for the presentation before the
event, and have the time to make comments. However, in a significant number of
organisations there is little non executive input or review. This was seen as a
matter for some concern. It was felt that it would be useful for there to be
broad guidelines concerning what is expected with regard to the non-audited
information in investor/ analyst presentations and in the pre-close statement.
This would be of use to non executives and also to finance directors. However,
it would be inappropriate for standards or regulations to be introduced in this
area.
