Factors Affecting MD&A Disclosures by SEC Registrants: Preparers' views regarding the IASB's Management Commentary Exposure Draft

©September 2010, 10 pages

Throughout the world, management commentary reports (Management Discussion and Analysis or MD&A in the United States (US) and Canada, Operating and Financial Review or Management Report in the United Kingdom (UK) and elsewhere) commonly accompany firm’s statutory financial statements. Regulators, such as the US Securities and Exchange Commission (SEC) and the Canadian securities regulators, and accounting standard setters including the UK Accounting Standards Board are of the view that the management commentary potentially fulfils an important function, by presenting a review of the firm’s financial and operating position and performance ‘through the eyes of management.’ This Issues Alert presents views from a very knowledgeable group of executives based in the US, Canada, UK, and Australia with extensive experience of public company financial reporting and SEC compliance. Generally, the interviewees agreed that the IASB should issue a guidance document rather than a formal reporting standard, to allow an easy fit with national reporting requirements and the company-specific nature of narrative reporting environment.