For more than a decade the scope of external reporting has been under constant strain from a swathe of new accounting standards and regulatory requirements which are in addition to local statutory reporting. External reporting has moved beyond the production of pure historical financial statements into a broader commentary on business strategy, current performance, trends, factors and risks likely to affect future outcomes. Companies around the world are also required to report on a range of non-financial matters that are also key to understanding their performance.
Despite these complicating factors one helpful trend to emerge, (encouraged by regulators and politicians), is that internal management reporting and external statutory reporting have more in common than they did a decade ago. So instead of having a complete separation between statutory and management reporting many businesses have successfully merged the two sets of needs into a common finance organisation, using a unified application environment which supports similar but not identical processes.
Nevertheless, financial reporting and consolidation cannot be viewed in a vacuum. In today’s volatile and uncertain markets, management needs to have its ‘finger on the pulse’ and this means merging actual data with, for example, budgeting, planning, forecasting, dash-boarding and score-carding applications in an body of applications which has become known as CPM (Corporate Performance Management). But by definition, a complete CPM environment has many ‘moving parts’ and this presents a dilemma for forwardlooking CFOs seeking to automate and standardise their CPM systems.