Confidence in Corporate Reporting 2007 - Our Community · 2014-09-26 · advice to keep abreast of any reforms and developments in the law. to the extent permitted by applicable law,

Confidence in Corporate Reporting 2007DetaileD FinDings

FINANCIAL REPORTING & GOVERNANCE

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Legal notice

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CPa australia ltd (“CPa australia”) is the largest professional organisation in australia with more than 112,000 members of the financial, accounting and business profession in australia and overseas.

For information about CPa australia, visit our website cpaaustralia.com.au

First published 2007

CPa australia ltd aCn 008 392 452 385 Bourke street Melbourne Vic 3000 australia

3

Foreword

CPa australia’s Confidence in Corporate Reporting began in 2002 as a means of capturing public attitudes to concerns triggered by the collapse of major international and local corporations including enron, HiH, and WorldCom.

Over the years we have adjusted the focus of the survey to reflect topical corporate issues. as a result, each year’s survey has provided a snapshot of attitudes and expectations on current corporate issues beyond corporate reporting.

in 2007, the survey predominantly focuses on sustainability issues. With an emissions trading scheme on the australian horizon and a growing number of businesses engaging in sustainability reporting, sustainability has never been more front-of-mind for business, government and the community.

to gather views on this topic, we commissioned an independent research agency to conduct nearly 800 telephone interviews. the sample included the australian public (including shareholders), business leaders (CeOs/CFOs/directors), auditors, fund managers and finance professionals (stock brokers, financial advisers and financial analysts).

the sustainability issues explored in the survey cover a broad range of topics, from levels of support for an emissions trading scheme, to the specifics of sustainability policy and reporting. Questions on corporate governance, the new auditing standards, confidence in capital markets and perceptions of business leaders were also included.

the results of the Confidence in Corporate Reporting 2007 provide an important perspective on the wider range of work CPa australia is undertaking in the broad areas of financial reporting, audit and assurance, corporate governance and sustainability. it also provides a basis for wider debate around what are, and will continue to be, extremely challenging issues for business, government and the australian community.

About CPA Australia

CPa australia is australia’s largest professional body. the organisation draws on the experience and expertise of its 112,000 finance, accounting and business members to provide an informed voice on public policy development in australia and internationally.

CPa australia members work and live in 98 countries worldwide. they are employed in a variety of positions across different industries and sectors. More than 20,000 members are at the highest levels of business leadership in roles that include CeO, company director and CFO.

Geoff Rankin FCPA Chief executive officer CPa australia

4

5

Table of contents

Foreword 3

Methodology 6

Findings 8

levels of confidence in australian corporations, local and overseas share markets, superannuation and investments

8

levels of confidence in the integrity of australian business leaders 2

impact of environmental reputation on decision making 8

sources of social and environmental investment information 9

sustainability policy and reporting 9

Most effective ways to encourage companies to behave in a more environmentally sustainable way

10

support for reporting of water use 10

support for introduction of a carbon emissions trading scheme in australia 10

Corporate governance 10

new audit standards 11

Detailed findings 12

6

CPa australia commissioned Di Marzio Research (an independent research organisation) to undertake the Confidence in Corporate Reporting 2007.

Di Marzio Research conducted the survey during October and november 2007, using a telephone interview method.

the sample included:

300 members of the australian public (including shareholders) who were in paid employment at the time of •the survey or in the past, including retirees

150 financial analysts, advisers and stockbrokers •

200 CeOs, CFOs, directors •

100 auditors — internal or external•

44 institutional investors/fund managers•

as in the past, random samples were sought from:

white.pages.com.au for the public sample•

yellow.pages.com.au for the analyst/adviser and stockbroker sample•

the CPa australia member database for other respondent categories•

the following notes apply to all tables throughout this report:

total public includes direct shareholders and non-shareholders.•

shareholders are those who have direct share market investments.•

Finance professionals include stockbrokers, financial advisers and financial planning consultants.•

Fund managers include institutional investors and are not included in financial professionals.•

‘Don’t know’ responses not shown.•

Table 1: sample details: general public

total public (300)%

GenderMale 50Female 50AgeUnder 25 years 825 – 40 years 2141 – 55 years 34Over 55 years 36

Employment statusself-employed 9employed fulltime 39employed part-time 18Home duties 4Retired on a pension 13self-funded retiree 11student 1not employed at the moment 4

OccupationMiddle/upper white collar 15lower white collar 59semi-skilled blue collar 21Unskilled blue collar 4

total public (300)%

Managerial statusOwner or chief executive 14senior manager 7employee 61

Educationsecondary or less 39trade/vocational qualification 16tertiary qualification 44

LocationMelbourne 27sydney 27Other (Brisbane, adelaide, Perth) 46

Share market investmentsDirectly 29as part of managed fund 19all of the above 6none of the above 45

Share market interest active interest 35Passive interest 49no interest 17

Methodology

7

Methodology

Table 2: sample details: finance professionals and fund managers

Finance professionals (150)% Fund managers (44)%

GenderMale 83 89

Female 17 11

AgeUnder 25 years 2 2

25 – 40 years 34 55

41 – 55 years 34 39

Over 55 years 30 5

Core businessstockbroking 8 na

Financial planning 69 na

accounting 17 na

Real estate 4 na

Banking 1 na

LocationMelbourne 30 43

sydney 30 43

Brisbane 20 9

adelaide/Perth 20 5

Table 3: sample details: directors, CEOs, CFOs and auditors

Directors/CeOs/CFOs (200)% auditors (100)%

GenderMale 86 64

Female 14 36

AgeUnder 25 years 0 3

25 – 40 years 15 54

41 – 55 years 54 29

Over 55 years 29 14

LocationMelbourne 29 31

sydney 29 31

Brisbane 20 20

adelaide 10 10

Perth 12 9

CPA member status

FCPa 23 12

CPa 63 54

asa 14 34

8

1. Levels of confidence in Australian corporations, local and overseas share markets, superannuation and investments

this year’s survey results indicate that there has been some fluctuation in confidence levels across all the respondent categories. While respondents’ confidence in superannuation and investments has typically increased compared to one year ago, confidence in overseas share markets is down. in particular, fund managers displayed a marked decrease in confidence (50 per cent of fund managers surveyed have decreased confidence in the australian share market, and 57 per cent have decreased confidence in the overseas share markets). For the majority of respondents, confidence in corporations has stayed the same. However, there has been a slight increase in confidence in corporations when compared to the results for the same question in 2006 (6 percent had increased confidence in 2006, while 23 percent had increased confidence in 2007).

2. Levels of confidence in the integrity of Australian business leaderssurvey results indicate that there is a marked difference between the respondent categories in their confidence levels in the integrity of various types of business leaders:

Of all the categories of respondents, the public have the least confidence in the integrity of business leaders.•

the majority of auditors have very high/quite high confidence in the integrity of all the business leader •groups (company directors, CeOs/MDs, management in general, company auditors and company regulators), with only 8 – 11 per cent having low confidence for any leader group.

the majority of finance professionals, business leaders and fund managers also have very high/quite high •confidence in all business leader groups, with the exception of company regulators (slightly larger proportions indicated lower levels of confidence in company regulators).

3. Impact of environmental reputation on decision makingthe survey results show that an unfavourable environmental reputation is a substantial disadvantage for a company. the majority of respondents from all categories indicated that they would be discouraged from working for a company with an unfavourable environmental reputation, investing in it, providing services or supplies to it, or buying its products or services. However, the survey also indicated that relatively low numbers of respondents had personally sought information about the environmental activities of their employer, investment fund, superannuation fund or a particular company.

CPa australia previously explored the impact of environmental reputation on decision making in the Confidence in Corporate Reporting 2005. Compared with the 2005 survey results which were very high, there has been a slight decline in the percentage of respondents who are discouraged from working for a company with an unfavourable environmental reputation, investing in it, providing services or supplies to it, or buying its products or services. the table comparing the impact of environmental reputation on decision making illustrates the decline in the overall figures.

Table 4: the impact of environmental reputation on decision making from the Confidence in Corporate Reporting 2005 and 2007

2005 total sample (700)% 2007 total sample (799)% Change%

Discouraged a lot or a little from working for the company 93 86 - 7

Discouraged a lot or a little from investing in the company 92 85 - 7

Discouraged a lot or a little from providing services or supplies to the company

78 69 - 9

Discouraged a lot or a little from buying the company’s products or services

86 85 - 1

Findings

9

Findings

4. Sources of social and environmental investment informationthe survey results show that respondents are using a range of information sources to choose socially and environmentally responsible investments. annual reports are favoured across all respondent categories, particularly by the public. Ratings agencies and investor briefings are more likely to be favoured by the other respondent categories.

these results are quite different from the information preferences nominated by respondents in the Confidence in Corporate Reporting Research 2005. in 2005, financial advisors were favoured by all respondent categories, while annual reports only made it into the auditors’ top two most relied upon sources of information.

Table 5: the top two most relied upon sources of information when making socially and environmentally responsible investments from the Confidence in Corporate Reporting 2005 and 2007

Respondent categories top two most relied upon sources of information — 2005

top two most relied upon sources of information — 2007

Public Financial advisor (53 per cent)sustainability report (46 per cent)

Financial advisor (35 per cent)annual report (34 per cent)

Finance professionals Financial advisor (63 per cent)Ratings agencies (51 per cent)

Ratings agencies (51 per cent)Financial advisors (49 per cent)

Fund managers n/a investor briefings (27 per cent)annual report (23 per cent)

Business leaders Ratings agencies (41 per cent)Financial advisor (37 per cent)

Ratings agencies (45 per cent)annual report (23 per cent)investor briefings (23 per cent)

auditorsRatings agencies (48 per cent)annual report (46 per cent)Financial advisor (46 per cent)

Ratings agencies (45 per cent)annual report (32 per cent)

5. Sustainability policy and reportingOverall, 75 per cent of respondents supported companies being required by law to prepare sustainability reports that cover their social and environmental impacts. support was strongest among the general public (88 per cent) and auditors (78 per cent), with fund managers displaying the least support (52 per cent). all respondent categories supported a requirement for companies to have an independent review of their sustainability report conducted (overall 73 per cent), with lesser levels of support among business leaders (57 per cent) and fund managers (55 per cent).

there is strong agreement among all respondent categories (over 90 per cent) that sustainability reports should cover both environmental and social factors. survey results also revealed that respondents expect the following social and environmental factors to be included in a sustainability report:

environmental policy and performance (96 per cent overall)•

social policy statements or guidelines (82 per cent overall)•

health and safety policy and performance (81 per cent overall)•

use of natural resources by suppliers (81 per cent overall)•

human rights policy and performance (70 per cent overall) •

supply chain standards for social issues (64 per cent overall).•

Respondents also placed importance on the inclusion of measurement of past performance, analysis and discussion of past performance, discussion of ongoing strategies, and description of specific environmental and social risks in sustainability reports.

10

Findings

Views were split though, on the preferred format to view information about the environmental performance of a company. Overall:

40 per cent preferred an online/hard copy annual report•

30 per cent preferred a stand-alone sustainability report•

28 per cent preferred the company’s website•

6. Most effective ways to encourage companies to behave in a more environmentally sustainable way

Overall, all respondents thought that competitive pressures, government regulation, government incentives, stakeholder demand and market-based mechanisms would all encourage companies to behave in a more environmentally sustainable way. Of these, opinion was split between the most effective:

33 per cent supported government regulation•

21 per cent supported competitive pressures•

18 per cent supported government incentives•

14 per cent supported stakeholder demand•

12 per cent supported market-based mechanisms•

7. Support for reporting of water usethere is strong support among the public for companies to be required to report their use of water in their annual report (91 per cent). the majority of respondents across the other categories also support companies reporting their use of water, but to a lesser extent: finance professionals (72 per cent); business leaders (65 per cent); auditors (61 per cent); and fund managers (52 per cent).

8. Support for introduction of a carbon emissions trading scheme in Australia

there is strong support for the introduction of an australian emissions trading scheme within the next five years across all respondent categories. support is strongest among finance professionals (84 per cent), followed closely by fund managers (82 per cent), the general public (78 per cent), auditors (77 per cent) and business leaders (76 per cent).

9. Corporate governancethe asX Corporate Governance Principles and Recommendations were recently revised and will take effect from 1 January 2008. the fundamental basis for the principles and recommendations is an ‘if not why not’ approach to compliance. Companies do not have to fulfill the guidelines, but where they fail to do so they must disclose why.

the promotion of ethical and responsible decision-making, and the recognition and management of risk are two of the fundamentals to any corporate governance structure. Respondents were united in their reaction to ways that companies can use the two principles in their operations. interestingly, respondents expressed strong support for the disclosure of all material business risks. this is not required by the current asX Corporate Governance Principles and Recommendations. such support may indicate a momentum towards increased reporting in this area, in addition to what is already required.

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Findings

there was strong agreement across all respondent categories that:

Companies should be required to adopt a written code of conduct or ethics which details acceptable •behaviour for directors, senior executives and employees (92 per cent).

Codes of conduct/ethics should outline consequences for those who breach the code (93 per cent).•

Companies should be required to disclose all material business risks (83 per cent).•

Companies’ disclosure of how they intend to manage material business risks is useful (87 per cent). •

10. New audit standardsOn 1 May 2006, the auditing and assurance standards Board (aUasB) issued thirty-five new legally enforceable australian auditing standards (asas), following a review of the existing auditing standards. the asas apply to all audits conducted under the Corporations Act 2001 for reporting periods commencing on or after 1 July 2006.

Most companies reported under the new standards for the first time in the 2006-07 financial year.

Prior to the application of the new auditing standards, CPa australia released Perceptions of Audit Reform, the findings of a survey of nearly 80 finance, accounting and business professionals and academics who took part in CPa australia’s new auditing standards Workshops series in 2006. the majority of the survey respondents were auditors.

the 2006 survey found that 79 per cent of survey respondents believed that the new standards would improve audit quality. in contrast, the 2007 results show that only 36 per cent of respondents overall believe that the new standards have improved quality. However, the percentage is higher for auditors (53 percent of auditors believe the standards have improved audit quality).

the reduction in percentage may be due to the initial investments auditors have had to make as a result of the new standards, such as staff training and updating their audit manuals. the benefits of the new standards may be better realised in following years. the low percentages among other groups might be an indication of an expectation gap between auditors and users of audit services with respect to the impact of the new standards on audit quality.

the 2006 research also captured views on whether respondents believed that the new audit standards would improve public confidence in financial reports (60 per cent of respondents believed it would). in 2007, 37 percent of respondents overall believe that the standards have improved their own confidence in financial reports. However, the percentage is higher for auditors (58 percent).

Other topics explored in the 2006 research include whether respondents felt that the time and cost required to complete an audit would increase following implementation of the new audit standards. the 2007 research shows that there has been a 10 per cent reduction in the perception of time required to complete an audit following application (75 per cent of respondents believed it would increase the time required to complete an audit in 2006). in contrast, there has been a slight increase in the perception of the cost of completing an audit, rising from 68.5 per cent in 2006 to 72 per cent in 2007.

12

Detailed findings

Table 6: confidence in Australian corporations, local and overseas share markets, superannuation, and investments

Compared with one year ago, has your level of confidence increased, decreased or stayed about the same?

total sample (799)%

total public

(300)%

shareholders Finance professionals

(150)%

Directors/CeOs/CFOs (204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Major corporations in Australia

increased 23 14 17 11 29 27 34 23

Decreased 13 18 18 17 7 9 11 23

same 61 64 62 66 63 63 50 52

The Australian share market

increased 32 25 35 14 40 34 39 18

Decreased 20 14 14 13 19 26 17 50

same 42 47 44 50 41 38 40 32

Overseas share markets

increased 15 9 10 8 28 14 15 11

Decreased 38 28 34 22 41 46 38 57

same 31 34 32 37 27 29 34 20

Personal superannuation (605)

increased 42 35 43 27 na 48 53 na

Decreased 8 7 9 5 na 9 7 na

same 43 46 42 51 na 42 39 na

Personal investments (605)

increased 41 32 44 19 na 48 52 na

Decreased 7 6 8 4 na 10 3 na

same 42 47 44 50 na 37 39 na

13

Detailed findings

Table 7: level of confidence in business professionals and regulators

Can you tell me if your level of confidence in the integrity of the following business professionals is very high, quite high, neither high nor low, or low?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs (204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Company directors

Very high 5 4 3 6 4 8 4 7

Quite high 44 26 32 19 59 53 48 66

neither high nor low 35 42 40 43 30 31 40 20

low 14 26 24 28 7 6 8 7

CEOs or MDs

Very high 5 5 4 6 3 7 4 9

Quite high 47 26 34 18 62 59 50 73


low 16 30 26 34 8 8 8 2

Management in general

Very high 5 4 5 3 3 7 3 5

Quite high 46 27 31 23 58 57 51 75


low 11 20 16 24 4 5 11 2

Company auditors

Very high 12 8 10 6 12 14 17 20

Quite high 41 31 37 25 40 49 51 52


low 13 17 15 19 13 10 9 9

Company regulators

Very high 7 4 6 3 6 7 13 14

Quite high 32 25 29 21 31 34 44 48


low 21 25 28 22 22 20 11 16

14

Detailed findings

Table 8: seeking out environmental information

Have you personally ever sought information about environmental activities?

total sample (799)%

total public

(300)%

shareholdersFinance

professionals (150)%

Directors/CeOs/CFOs

(204)%auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Your employer 23 21 25 17 11 32 28 14

a particular company 20 16 18 14 19 21 28 32

an investment fund, such as a managed fund 17 10 11 10 39 10 8 43

a superannuation fund 13 12 12 13 21 8 8 16

none of the above 58 66 62 71 51 56 54 41

Figure 1: whether information has been sought about environmental activities of certain entities

50

40

30

20

10

0

%

Shareholders Non-shareholders

Sought information about your employer

Financeprofessionals

Fundmanagers

Directors/CEOs/CFOs

Auditors

25

1114

32

17

28

50

40

30

20

10

0

%


Sought information about a particular company


Fundmanagers

Directors/CEOs/CFOs

Auditors

1814

19

32

21

28

15

Detailed findings

50

40

30

20

10

0

%


Sought information about an investment fund/managed fund


Fundmanagers

Directors/CEOs/CFOs

Auditors

11

43

1010 8

39

50

40

30

20

10

0

%


Sought information about a superannuation fund


Fundmanagers

Directors/CEOs/CFOs

Auditors

12 1613

88

21

16

Detailed findings

Table 9: impact of environmental reputation on employment, investment and consumer decision making

if a company has an unfavourable environmental reputation would this discourage you a lot, a little or not at all?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Working for the company

Discourage a lot 52 59 56 62 49 47 46 55

Discourage a little 35 27 29 24 35 43 40 36

not at all discouraged 12 13 14 12 17 9 11 9

Investing in the company

Discourage a lot 51 64 63 65 41 46 47 36



Providing services or supplies to the company

Discourage a lot 32 47 46 47 23 20 33 18



Buying the company’s products and services

Discourage a lot 45 56 56 55 38 37 44 32



Figure 2: extent to which a company’s unfavourable environmental reputation discourages certain activities

100

0

%


Discourages working for the company


A lot A little

Fundmanagers

Directors/CEOs/CFOs

Auditors

85

56 6249

3536

55 47

4340

46

29 24

9186 869084

17

Detailed findings

100

0

%


Discourages investing in the company


A lot A little

Fundmanagers

Directors/CEOs/CFOs

Auditors

89

63 65 41

37 39

3646

39 44

47

2621

7586 918578

100

0

%


Discourages providing services/supplies to the company


A lot A little

Fundmanagers

Directors/CEOs/CFOs

Auditors

76

46 4723

36 41

18 20

4340

33

30 35

5982 736359

100

0

%


Discourages buying their products/services


A lot A little

Fundmanagers

Directors/CEOs/CFOs

Auditors

89

56 5538

3955

32 37

4744

44

33 33

8788 888477

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Detailed findings

Table 10: approaches that will encourage companies to behave in a more environmentally sustainable way

Which of the following do you believe encourage, or would encourage, companies to behave in a more environmentally sustainable way? and which of those do you believe are, or would be, most effective in encouraging companies to behave in more environmentally sustainable ways?

total sample (799)%

total public

(300)%

shareholdersFinance

professionals (150)%

Directors/CeOs /CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156) %

no (144)%

encourage competitive pressures

Yes 84 84 83 84 87 83 84 89

no 13 13 13 12 12 13 15 11

encourage government regulation

Yes 89 88 88 88 92 86 94 91

no 10 10 10 10 7 14 6 9

encourage government incentives

Yes 87 85 83 87 89 86 85 95

no 12 12 13 10 11 12 14 5

encourage stakeholder demand, i.e. shareholders or general public

Yes 76 74 76 73 74 73 86 82

no 22 22 22 21 24 25 14 16

encourage market-based mechanisms, i.e. emissions trading schemes

Yes 70 61 64 58 79 73 72 84

no 19 20 21 20 17 21 18 16

Competitive pressures are most effective

21 15 16 14 20 27 28 14

government regulation are most effective

33 31 31 31 35 31 36 41

government incentives are most effective

18 26 24 27 15 12 15 18

stakeholder demand, ie. shareholders or general public are most effective

14 14 17 12 13 15 15 9

Market-based mechanisms, ie. emissions trading schemes are most effective

12 10 10 10 15 15 7 16

19

Detailed findings

Figure 3: extent to which certain options are felt to encourage environmentally sustainable corporate behaviour

100

80

60

40

20

0

%

Competitivepressures

Governmentregulation

Governmentincentives

Stakeholderdemand

Marketmechanisms

‘Yes’, sustainable behaviour is encouraged

84 87

7670

89

100

80

60

40

20

0

%

Competitivepressures

Governmentregulation

Governmentincentives

Stakeholderdemand

Marketmechanisms

Most effective encouragement

2118

14 12

33

20

Detailed findings

Table 11: impact of social and environmental factors on investment decision making

i am going to read out a number of sources of information you may consider if you were choosing a socially and environmentally responsible company, fund or industry to invest in. as i read each out, would you tell me if you would rely a lot, a little, or not at all on these sources?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Sustainability report

a lot 22 23 21 25 19 20 28 20

a little 55 55 58 52 57 54 56 59

not at all 20 18 19 17 23 23 15 18

Annual report

a lot 29 34 32 35 28 23 32 23

a little 53 48 49 46 49 62 54 52

not at all 17 16 17 15 22 16 14 25

Company website

a lot 17 19 17 22 13 14 24 16

a little 54 43 42 45 57 63 58 57

not at all 28 35 41 29 29 22 18 27

Advice from a financial advisor

a lot 32 35 31 40 49 22 25 5

a little 44 47 48 47 35 46 50 25

not at all 24 16 21 12 14 32 26 66

Ratings agencies

a lot 33 23 23 23 51 30 45 16

a little 45 46 46 45 38 49 42 55

not at all 20 26 26 26 10 20 13 30

Media reports

a lot 20 22 22 22 16 21 22 16

a little 55 49 50 48 61 55 62 52

not at all 24 27 27 28 23 23 13 32

Investor briefings

a lot 23 21 21 21 27 23 25 27

a little 57 53 56 50 59 61 55 57

not at all 18 21 20 23 13 15 19 16

Investor newsletters

a lot 14 15 14 16 14 10 19 9

a little 60 55 60 49 65 63 58 66

not at all 25 28 25 31 19 27 21 25

21

Detailed findings

Table 12: expectations of sustainability policy and reporting

Which of the following would you expect to be included in a company’s sustainability policy? Which of the following issues would you expect to read about in a company sustainability report? in a company sustainability report would you rate the following information as very important, quite important or not so important.

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs

(204)%

auditors (101)%

Fund mangers (44)%

Yes (156)%

no (144)%

expect to see environmental factors only 4 3 3 3 4 4 6 5

expect to see social factors only 1 2 2 1 n/a 0 n/a n/a

expect to see environmental and social factors 93 92 92 91 95 94 93 95

expect to see none of these 1 2 2 2 1 1 1 n/a

expect to read environmental policy and performance

Yes 96 95 96 94 95 97 99 98

no 3 4 3 4 3 3 1 2

expect to read health and safety policy and performance

Yes 81 86 86 87 75 80 77 84

no 18 13 14 12 24 19 23 16

expect to read social policy statements or guidelines

Yes 82 82 83 81 85 80 87 73

no 16 15 13 17 14 20 12 25

expect to read supply chain standards for social issues

Yes 64 72 69 74 64 52 69 59

no 29 20 21 19 27 44 25 34

expect to read use of natural resources by suppliers

Yes 81 88 85 92 80 75 79 66

no 17 9 13 5 16 24 20 34

expect to read human rights policy and performance

Yes 70 80 76 84 67 56 72 70

no 29 19 22 15 32 43 26 27

importance of past performance measurement

Very important 36 41 38 45 29 25 46 50

Quite important 47 42 44 41 51 53 46 39

not so important 16 15 18 13 18 22 9 11

importance of past performance analysis and discussion

Very important 29 35 29 40 27 19 35 41

Quite important 50 48 53 43 52 52 50 48

not so important 19 16 17 15 20 27 16 11

importance of discussing of ongoing strategies

Very important 58 58 63 53 58 59 61 50

Quite important 35 36 32 40 38 32 33 43

not so important 5 5 4 6 2 8 6 7

importance of describing specific environmental and social risks

Very important 51 58 55 62 46 44 51 48

Quite important 41 35 38 31 47 42 45 41

not so important 7 6 6 6 5 12 4 11

22

Detailed findings

Figure 5: rating of sustainability report information

100

0

%


Measure of past performance


Very important Quite important

Fundmanagers

Directors/CEOs/CFOs

Auditors

82

38 4529

51

39

5025

53

46

46

4441

8986 927880

100

0

%


Analysis and discussion of past performance



Fundmanagers

Directors/CEOs/CFOs

Auditors

82

2940

27

52

48

4119

5250

35

5343

8983 857179

100

0

%


Discussion of ongoing strategies



Fundmanagers

Directors/CEOs/CFOs

Auditors

95

63 53 58

38 43

50 59

3233

61

3240

9393 949196

23

Detailed findings

100

0

%


Description of specific environmental and social risks



Fundmanagers

Directors/CEOs/CFOs

Auditors

93

55 6246

47 41

48 44

4245

51

38 31

8993 968693

Table 13: preferred format for reporting environmental performance

in which of these three ways would you prefer companies to provide information about environmental performance?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs /CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Online/hard copy annual report 40 42 44 41 35 40 41 34

sustainability report 30 29 28 30 38 29 25 30

Company website 28 25 26 24 26 30 35 36

Table 14: compulsory sustainability reporting

should companies be required by law to complete compulsory sustainability reporting?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Companies should prepare sustainability reports that cover their social and environmental impacts

75 88 85 92 68 64 78 52

Companies should have an independent review of their sustainability report conducted

73 87 87 88 69 57 79 55

24

Detailed findings

Table 15: organisations reporting their use of water

Do you think organisations should have to report on their use of water in their annual report?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Yes 75 91 89 94 72 65 61 52

no 22 7 10 4 24 32 35 41

Figure 4: water use reported in annual reports

100

80

60

40

20

0

%

Shareholders Non-shareholders Financeprofessionals

Fundmanagers

Directors/CEOs/CFOs

Auditors

89

72

52

65

94

61

Table 16: levels of support for the introduction of a carbon emissions trading scheme in Australia in the next five years

Do you support the introduction of a carbon emissions trading scheme in australia within the next five years?

total sample (799)%

total public

(300)%


(150)%

Directors/ CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

144)%

Yes 79 78 81 75 84 76 77 82

no 11 12 12 13 9 12 11 9

Don’t know 10 9 6 13 7 12 12 9

25

Detailed findings

Figure 6: support for carbon emissions trading scheme in Australia

100

80

60

40

20

0

%

Shareholders Non-shareholders Financeprofessionals

Fundmanagers

Directors/CEOs/CFOs

Auditors

8276

12

75

13

77

11

84

9 9

81

12

Yes No

Note: ‘don’t know’ responses not shown.

Table 17: perspectives on corporate governance

Please tell me if you agree or disagree, either strongly or a little, with the following statements?

total sample (799)%

total public

(300)%


(150)%

Directors/CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%Yes

(156)%no

(144)%

Companies should be required to adopt a written code of conduct or ethics which details acceptable behaviour for directors, senior executives and employees

agree 92 95 97 93 91 88 95 86

Disagree 5 2 1 3 5 9 3 7

Codes of conduct/ethics should outline consequences for those who breach the code

agree 93 95 97 92 94 90 92 95

Disagree 5 3 2 3 5 7 8 5

Companies should be required to disclose all material business risks

agree 83 88 88 87 82 75 87 82

Disagree 12 7 6 8 12 20 11 16

a company’s disclosure of how they intend to manage material business risks is useful

agree 87 87 90 83 88 84 88 91

Disagree 8 7 5 8 7 10 8 5

26

Detailed findings

Table 18: impact of new audit standards on audit quality and confidence in financial reports

How have the aUasB’s 35 new legally enforceable australian auditing standards, issued in May 2006, impacted? Have the new auditing standards improved quality? Have they improved your confidence in financial reporting?

total sample (499)%

Finance professionals

(150)%

Directors /CeOs/CFOs

(204)%

auditors (101)%

Fund managers

(44)%

Improved audit quality

Yes 36 33 32 53 25

no 28 18 41 21 23

Confidence in financial reporting

Yes 37 33 31 58 25

no 36 25 50 25 36

Figure 7: confidence in financial reporting

60

40

20

0

%


Fundmanagers

Directors/CEOs/CFOs

Auditors

Yes No

3325 25

3631

5058

25

note: not asked of the public (shareholders and non-shareholders).

27

Detailed findings

Figure 8: audit quality improved under new accounting standards

60

40

20

0

%


Fundmanagers

Directors/CEOs/CFOs

Auditors

Yes No

3318 23

25 32

41

53

21

Table 19: impact of new audit standards on cost and time

Have you found that the new audit standards increased the time or cost of completing an audit.

auditors only (101)%

Increased time to complete audit

Yes 65

no 16

Increased cost to complete audit

Yes 72

no 9

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cpaaustralia.com.au

t 1300 73 73 73

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Confidence in Corporate Reporting 2007 - Our Community · 2014-09-26 · advice to keep abreast of any reforms and developments in the law. to the extent permitted by applicable law,