Optimizing your MD&A/OFR for the Web
By Dominic
Jones Related: Improving
the usability of financial statements
REGULATORS around the world are
increasingly seeking to enforce greater disclosure transparency
through a narrative report that provides management's
perspective on its business' current position and future
prospects.
In the United States and Canada, the Management's Discussion
and Analysis (MD&A) fulfills this function. In the
United Kingdom, the government is requiring a similar
report from quoted companies called the Operating and
Financial Review (OFR). Companies in other countries
either voluntarily provide, or are required to have,
a similar report.
No matter where it is found or what it is called, the
MD&A, OFR or Management Report has become the centerpiece
disclosure document after companies' annual audited
financial statements.
Yet although MD&A-type documents have been around
for 20 years, regulators and standards bodies have had
difficulty getting companies to produce what they consider
to be effective MD&As.
The SEC in particular has been critical of MD&A
disclosure. In February 2002, the commission released
a study of the MD&As of the Fortune 500 companies,
pointing out significant gaps and revealing that it
had sent comment letters to 350 of the 500 companies.
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