Trust in EU corporate reporting won’t be restored by longer templates. It will come from governance that works: boards that own the reporting process, audit committees that can challenge, and internal controls that are designed, operated and explained. Today, practice is uneven across Member States and many issuers don’t clearly state how effective their controls are.
What the EU needs, is a practical, light-touch fix: a short management statement on internal controls (naming the framework and any material weaknesses), stronger audit-committee capability and common terminology where it improves comparability – scaled to company size and maturity.
The result is more credible numbers, lower information asymmetry and higher confidence.
This commentary is based on a study carried out by CEPS and Milieu for DG FISMA. Please click here to read it.
