Recent Trends in Management Reporting

Recent Trends in Management Reporting

In this post you will study Recent Trends in Management Reporting. Study and make the proper notes grabbing full understanding of this topic.



Management reports aim at informing managers of different aspects of the business, to help them make better-informed decisions. They collect data from various departments of the company tracking key performance indicators (KPIs) and understandably present them.

They basically show the worth of the business over a specific time period by disclosing financial and operational information. Reporting for management provides insights on how the company is doing, empowering decision-makers to find the right path to increase operating efficiency and make pertinent decisions to remain competitive.

Management reporting is that part of management control system which provides adequate and time information covering various aspects of business to various levels od management in the form of reports, charts and statements at regular intervals for taking the decisions.


In 1994 a decision was made to review MIT’s management systems. It had become evident that timely and accurate management information had become difficult to obtain. This was because MIT had many different information processing systems that did not communicate with each other, resulting in unnecessary duplication of data and work.

In November of 1994 the Management Reporting Process Redesign Team presented its managers recommendations to the Reengineering Steering Committee. The team’s recommendations included:

  • Integrating processes and systems to provide real-time financial information across the Institute;
  • Reducing administrative activities connected with the procurement process;
  • Streamlining the Institute’s planning and budgeting processes; and
  • Adopting non-financial performance measures for MIT.

In March 1995, the Management Reporting and Financial Operations Project was created as a result of these recommendations. A major focus of the project has been the implementation of the SAP R/3 financial system. The first phase of the implementation was completed in September 1996 when SAP became the system of record at MIT.

At that time the central financial offices (CAO, Purchasing, OSP, etc.) began to use the software. The second phase now called Rollout98 will be completed when SAP has been distributed to all MIT departments, labs, centres and offices, and users have been trained and given access full functionality of the system.


International Financial Reporting Standards [IFRS] is recognized as global financial reporting standards. From 1st April 2011 Indian Accounting Standards were merged with the new IFRS.IFRS ensures more transparency, consistency and uniformity in accounting policies.

International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world.

Financial reporting is a standard accounting practice that uses financial statements to disclose a company’s financial information and performance over a particular period, usually on an annual or quarterly basis. In simple terms, a financial report is critical for understanding how much money you have, where the money is coming from, and where your money needs to go.

Financial reporting is important for management to make informed business decisions based on facts of the company’s financial health. Potential investors and banks will also use your company’s financial reporting to decide if they want to invest or loan you money.  


Interim Reporting is the reporting of financial results of any period that is shorter than a fiscal year.

IAS 34 does not specify which entities must publish an interim financial report. That is generally a matter for laws and government regulations. IAS 34 applies if an entity using IFRS Standards in its annual financial statements publishes an interim financial report that asserts compliance with IFRS Standards.

IAS 34 prescribes the minimum content of such an interim financial report. It also specifies the accounting recognition and measurement principles applicable to an interim financial report.

SEBI guidelines require companies listed on Stock Exchanges to publish their financial results on quarterly basis.

Interim reporting is the reporting of the financial results of any period that is shorter than a fiscal year. Interim reporting is usually required of any company that is publicly held, and it typically involves the issuance of three quarterly financial statements each year. These statements include the following:

  • Balance sheet. As of the end of the current interim period and the immediately preceding fiscal year.
  • Income statement. For the current interim period, and the fiscal year-to-date, and the corresponding periods for the immediately preceding fiscal year.
  • Statement of cash flows. For the current fiscal year-to-date period, and the corresponding period for the immediately preceding fiscal year.

The precise format and contents of interim reports issued by publicly-held companies are defined by the Securities and Exchange Commission. These reports are reviewed by a company’s auditors, rather than undergoing a complete audit.


It is the reporting of the operation segments of a company in the disclosure accompanying financial statements. AS 17 requires to report a segment if it has at least 10% of the revenue, 10% of the profit or loss, or 10% of the combined assets of the company.

Segment reporting is the reporting of the operating segments of a company in the disclosures accompanying its financial statements. Segment reporting is required for publicly-held entities, and is not required for privately held ones.

Segment reporting is intended to give information to investors and creditors regarding the financial results and position of the most important operating units of a company, which they can use as the basis for decisions related to the company.

Under Generally Accepted Accounting Principles (GAAP), an operating segment engages in business activities from which it may earn revenue and incur expenses, has discrete financial information available, and whose results are regularly reviewed by the entity’s chief operating decision maker for performance assessment and resource allocation decisions.

Segment Reporting Rules

Follow these rules to determine which segments need to be reported:

  • Aggregate the results of two or more segments if they have similar products, services, processes, customers, distribution methods, and regulatory environments.
  • Report a segment if it has at least 10% of the revenues, 10% of the profit or loss, or 10% of the combined assets of the entity.
  • If the total revenue of the segments that have selected under the preceding criteria comprise less than 75% of the entity’s total revenue, then add more segments until it reaches that threshold.
  • One can add more segments beyond the minimum just noted, but consider a reduction if the total exceeds ten segments.


The SEBI regulates governance practices of companies listed on Stock Exchanges. These regulations are notified under clause 49 of the Listing Agreements of Stock Exchanges. It prescribes the standards to be followed in the governance of the companies.

Corporate governance reports reflect how corporations monitor the actions, policies, practices and decisions of the corporation, as well as the effect of their actions on their agents and affected stakeholders.

A corporate governance report is also called the annual corporate report. It includes a statement of corporate governance procedures and compliance, information on board composition, statements on the company’s performance, and information about compliance and conformance with best practices for good corporate governance.

Statements of Disclosure of Governance Procedures and Compliance

The corporate report should include a statement of disclosure of the company’s governance procedures and compliance. It should also disclose the principles and codes that guide the company’s procedures. Disclosure statements usually detail the distribution of powers between the board chair and the CEO. 

Reporting of Information Relating to Group Companies [AS 21]RECENT TRENDS IN MANAGEMENT REPORTING
AS 21 requires companies to prepare consolidated Financial Statements. It is the presentation of subsidiary companies. The objective of consolidation is to show the performance of the group as if it were a single entity. The inter group transactions are eliminated in the consolidated Financial Statements.

A parent company presenting its consolidated financial statements must present these statements along with its standalone financial statements.

The users of financial statements of a parent company are typically concerned with and are required to be educated about, the results of operations and financial position of not only the company itself but also of that group together.

This requirement is served by offering the users of financial statements –

  • Standalone financial statements of a parent; and
  • Consolidated financial statements that provide financial information about the business group as that of a lone enterprise without respect to the legal restrictions of the distinct legal entities


recent trends in management reporting
recent trends in management reporting

A report is a vehicle carrying information to those who need it. A report is prepared by putting in labour by the executives The usefulness of the report will depend upon its quality and the way in which has been communicated. A report should be prepared in a way it serves the purpose and presented at a time when it is needed. Good reporting is thus essential for effective communication. A good report should have the following requisites:

GOOD FORM AND CONTENT: The following points be taken into account while preparing a report :

The report should be given a proper title, headings, sub-headings and paragraph divisions. The title will explain the purpose for which the report has been prepared the title also enables to point out the persons who need the report. A production report may be titled as ‘Production Report for the Month of April 1992’. The title explains the purpose and period of preparing the report.

(i) If statistical figures are to be given in the report then only significant figures and totals should be made a part of it and other detailed figures should be given in appendix.

(i) The reports should contain facts and not opinions. The opinion may come, if essential, as a sequel to certain facts and not otherwise.

(iv) The report must contain the date of its preparation and date of submission.

(v) If the report is prepared in response to a request or letter then it should bear reference number of such request or letter.

(vi) The contents of a report must serve the purpose for which it has been prepared. Separate reports be prepared for different subjects. Various aspects of the subject should be properly conveyed.

(vii) The contents of the report should be in a logical sequence.


The report should be presented in a simple, unambiguous and clear language. The language should be non-technical. If the report is loaded with technical terminology, it will reduce its utility because the reader may be unfamiliar with that language. The reader should be able to understand the report without any difficulty. If possible, charts, diagrams or graphs should be used for presenting the information.


Promptness in submitting a report is an essential element of a good report. The reports should be sent at the earliest.

The reports are to be based on information, the promptness in reporting will depend on quick collections of facts and figures. Following steps may help in quick reporting.

(i) A proper record-keeping system should be introduced in the organisation to meet informational needs.

(ii) To avoid clerical errors, mechanised accounting should be used.

(iii) The accounting work should be centralised to avoid bottlenecks in collecting information.


The reports should be presented only to the persons who need them. They should be marked to relevant officials. Sometimes reports are sent to various departments in a routine way, then it will involve unnecessary expenditure and the reports will not remain secret. The persons or departments to whom the report is to be sent must be clear to the sender. People do not give much attention to reports coming in a routine way. So, this type of practice involves unavoidable expenditure and reduces the importance of reports.


There should be a consistency in the preparation of reports. The comparability of reports will be possible only if they are consistent. For consistency, the reports should be prepared from the same type of information and statistical data. This will be possible if same accounting principles and concepts are used for collecting, classifying, tabulating and presenting of information. Consistency in reporting enhances their utility.


The reports should be reasonably accurate. Statistical reports may sometimes be approximated to make them easily understandable. The production of figures accurate up to paise may be difficult to remembered, their reasonable approximation may make the facts readable and understandable.


The reports should be addressed to appropriate persons in respective responsibility centres. The reports should give details of variances, which are related to that centre. This will help in taking corrective measures at appropriate levels. The variances which are not controllable at a particular responsibility centre may also be mentioned separately in the report.


The cost of preparing and presenting the report should also be considered. This cost should not be more than the advantage derived from such reports. The cost should be reasonable so that reporting may be used by all types of concerns. The cost-benefit analysis will help in deciding about the adoption of reporting system.


The reporting system is meant to help management in taking correct decision and improving the operational efficiency of the organisation. This objective will better be achieved if reports give comparative information.

The comparative information can be in relation to previous periods, current standards, or budgets. This information helps in finding out deviations or variances. Where performance is below standards or expectations, such variances can be highlighted in the reports. The management by exception’ is possible when exceptional information will be supplied to the management The comparative reporting will, at once, help the reader to reach at conclusions about the performance of the responsibility centre mentioned in the report.


Along with promptness, the frequency of reporting is also significant. The reports should be sent regularly when they are required. The timing of reporting will depend upon the nature of information and its purpose. Some reports may be sent daily, some weekly, some monthly and so on.

Frequency of reports means that these should be sent when required. The reports are prepared at appropriate times and sent to appropriate persons as per their requirements.


In the modern era of large-scale production and ever-changing economic conditions with rapid technological developments, it is imperative to prepare additional reports for continuous evaluation of business activities, which will result in an increased cost of reports presentation.

Management reporting systems are like sense organs to the body. Without sense organs the body is unable to react to any given circumstance and take decisions. Similarly, without efficient reporting system management is unable to make any policy and operating decisions.

Also Study
Management Accounting Nature and Scope
Difference between Financial accounting and management accounting
Difference between Management accounting and cost accounting
Management accounting, financial accounting and cost accounting
recent trends in management reporting
recent trends in management reporting

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