The CFA Institute has released a study on the impact of the reporting frequency of UK public companies which has revealed that a change introduced in 2014 has done little to address short-termism.
In 2007, public companies in the UK were required to report on a quarterly basis, this was changed in 2014 requiring companies to report on a semi-annual basis.
The CFA Institute study found that the frequency of financial reports had no material impact on levels of corporate investment. However, mandatory quarterly reporting was associated with an increase in analyst coverage and an improvement in the accuracy of analyst earnings forecasts.
Quarterly reporting was criticised for favouring short-termism in the sense that it pushed corporate executives to focus on maximising profits in the next three months. However, semi-annual reporting has only shifted their focus to the next six months and not the next five years, the CFA survey found.
The survey findings are available on the CFA Institute website:
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
