As of January 1st 2020 there is a new regulation. European capital market-oriented companies must now prepare their annual financial reports in a single electronic reporting format, the ESEF format, in order to facilitate and simplify the accessibility, analysis and comparability of annual financial reports. Issuers, investors and competent authorities can benefit from this.
However, this implementation effort of the ESEF is also a challenge for the companies when it comes to the set-up process. The subject of the financial statement audit here is the electronic reproduction in ESEF format prepared for disclosure purposes, whereby the ESEF format must already be available at the time of the audit opinion being issued.
However, the reservations of the companies concerned about the tasks to be performed are understandable. Even if these requirements are indispensable, there are at the same time opportunities and certain advantages that this digitalisation of financial reporting brings, such as positive impulses when it comes to the standardisation of information in the annual financial report and the possibility of immediate further processing of machine-readable information.
The fact is that the trend towards digitisation is not difficult to identify. In recent years, there has been a marked decline in the number of printed copies of annual reports, although this ultimately has an impact on the presentation of information in the annual report and the way in which it is communicated to investors. Instead of Excel files, the financial report would be presented in an uniform, machine-readable and analyzable ESEF format. This would also make it possible to shorten the annual report in the long term.
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