Corporate Financial Reporting Complexity: Recommendations for Improvement‪.‬

Executive Summary Despite the improvements in financial reporting stemming from SarbanesOxley, the U.S. financial reporting system continues to face a number of challenges. Conceivably the most urgent is the need to reduce complexity, and thereby improving transparency and increasing the usefulness of reported financial information to constituents. This paper examines the Final report of the Advisory Report of the Advisory Committee on Improvements to Financial Reporting, and offers recommendations to progressively redress the existing complex system of standards, rules, and regulations that fail to provide relevant and transparent financial information. This complexity has been mounting for many years as a result of different forces; structural, institutional, cultural, behavioral, and political. It is believed that these recommendations, if implemented, would achieve measurable improvements to the current financial reporting system. The paper concentrates on the sources that create substantive complexity and provides an analytical insight of the recommendations. This paper also provides implications for accounting educators and practicing professionals.