Better Financial and Business Disclosure Needed for the Digital Age

A recent article by Mike Willis, of the SEC, formerly of PWC, is remarkable in its insight and relevance. Mr Willis points out that the current disclosures are outdated and rooted in the paper age. He suggest a program of "investor testing" to see what information they want in order to make decisions. He points out that we need to broaden our concept of what disclosures are needed by investors.

Mr Willis also argues that the digital age calls for digital data to be made available, not paper based information. It calls for the use of structured data for delivering this data. It also requires a significant revision of Edgar in order to maximise the usefulness of the digital data that is required.

An important mention in the article is that of smartphones, which are now widely used for internet apps and are very useful for reading and analyzing data. But the right data needs to be available ,and in a format that can easily be analyzed.

If Edgar and the disclosure system needs revision, the SEDAR system in Canada needs it even more. There, financial reports are filed in pdf form, which offer no opportunity for analysis of data. Data can only be accessed when the data from the pdf is re-input into a separate tool. That is inefficient and unfair to investors who should be able to get the information they need in usable form - even on smartphones.

For Mr Willis' article, click this link.