Shareholders' perspective on management commentary of Simonds Farsons Cisk plc. : a case study

Abstract

Through narrative reporting, the users of financial statements, especially the capital providers, are provided with enhanced explanation of the important issues that the entity faced throughout the year under review. Apart from the historical information, shareholders must also be presented with information on the direction that the entity is heading to and any related issues. In this dissertation, consideration of the regulations and guidance documents on the management commentary of various standard-setters and regulators has been taken into account, for a better understanding of what is expected in these reports. Among these, there is the exposure draft on the guidance document on management commentary issued by the International Accounting Standard Board half way through 2009. Moreover the comment letters received by the International Accounting Standard Board on this exposure draft have also been taken into consideration. Furthermore, the views of Simonds Farsons Cisk plc's shareholders has been sought to gain a better understanding of their perspective on management commentary. Thus this study, will analyse whether the management commentary is being used and to what extent it is being utilised by the shareholders of this entity in question. Moreover, the shareholders have identified those areas that need improvement in order to increase their interest in the management commentary and assess whether the contents of the management commentary of Simonds Farsons Cisk plc suffice for the shareholders as a means of interpreting the financial statements for decision-making purposes.