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Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
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We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
Business risk services
The relationship between a company and its auditor has changed. Organisations must understand and manage risk and seek an appropriate balance between risk and opportunities.
As organisations become increasingly dependent on digital technology, the opportunities for cyber criminals continue to grow.
Forensic and investigation services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
Mergers and acquisitions
Globalisation and company growth ambitions are driving an increase in M&A activity worldwide. We work with entrepreneurial businesses in the mid-market to help them assess the true commercial potential of their planned acquisition and understand how the purchase might serve their longer- term strategic goals.
Recovery and reorganisation
Workable solutions to maximise your value and deliver sustainable recovery
Transactional advisory services
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
The International Financial Reporting Standards (IFRS) are a set of global accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of public company financial statements. At Grant Thornton, our IFRS advisers can help you navigate the complexity of financial reporting from IFRS 1 to IFRS 17 and IAS 1 to IAS 41.
Audit quality monitoring
Having a robust process of quality control is one of the most effective ways to guarantee we deliver high-quality services to our clients.
Global audit technology
We apply our global audit methodology through an integrated set of software tools known as the Voyager suite.
Corporate and business tax
Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
Direct international tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
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Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
Indirect international tax
Using our finely tuned local knowledge, teams from our global organisation of member firms help you understand and comply with often complex and time-consuming regulations.
Innovation and investment incentives
Dynamic businesses must continually innovate to maintain competitiveness, evolve and grow. Valuable tax reliefs are available to support innovative activities, irrespective of your tax profile.
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Our solutions include dealing with emigration and tax mitigation on the income and capital growth of overseas assets.
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
Tax policies are constantly evolving and there are a number of complex changes on the horizon that could significantly affect your business.
In the push to become transparent, businesses are disclosing vast swathes of information about themselves – yet many are becoming more opaque as a result.
Businesses are disclosing more and more information. It’s being driven by a combination of regulation, shareholder activism and the power of social media. But is it having the intended effect?
The short answer is no. Research published by the University of North Carolina’s Kenan-Flagler Business School suggests that corporate information is actually becoming more opaque. Anyone wishing to read the annual business and financial summaries that public companies have to file in the United States (form 10-K), for example, would need to have accrued 21.65 years of formal education to comprehend them, such is their complexity.
Leslie Seidman, a former chairman of the Financial Accounting Standards Board in the United States, has not been alone in pointing out a worrying consequence. As he told CFO.com: “Many senior executives have got to the point where they don’t understand what the key messages are in their own financial statements.”
Nor is this phenomenon confined to the United States. Research by Grant Thornton on the FTSE 350 shows that the average annual report comes in at 300,000 words – half of which is typically historical financial data. It illustrates that companies are struggling to apply the materiality concept – the accounting principle that says trivial matters are to be disregarded and important matters are to be disclosed.
Madeleine Mattera, head of financial services at Grant Thornton Australia, points out that investors don’t always know what they want. She says: “Shareholders are rightly concerned with returns in the mid to long term and the sustainability of those returns. Transparency is often assumed – until a company is on the front pages for something that indicates a lack of transparency – examples include an ecological disaster or being linked to modern slavery.”
Sue Almond, head of assurance at Grant Thornton UK, says: “Greater transparency usually just means more volume. The key to effective transparency is to strike a balance between holding back vital information and swamping investors with too much detail. Providing a huge bank of data effectively says: ‘Here it is – now get on with it’. It isn’t the way you would treat customers, so why should investors get this kind of treatment?”
One sector where there has been pressure for greater transparency from shareholders – prompted by a series of environmental disasters, allegations of ‘greenwashing’ and the growing profile of ethical investing – is the oil industry, with companies such as BP, Shell and ExxonMobil subjected to increasing levels of scrutiny about their environmental, social and governance activities.
In such politically sensitive sectors there may also be those keen to inflict reputational damage. Almond gives the example of an oil company, which might commit to build schools, infrastructure or make one-off payments to the local community in exchange for drilling rights.
She says: “It takes a lot of explaining in documentation and it can be taken out of context. It’s not helpful to the company, or to the investor community, if it gets damaged reputationally in a way that’s unwarranted.”
Businesses need to be aware of the power of social media to twist and distort their disclosures. Mattera says: “Social media provides a platform for an unprecedented number of users to voice opinions with no requirement for responsibility, or even to tell the truth. The role of social media as the banner of community standards is extremely powerful and many companies now build social-media meltdown and the massive reputational crisis that it can cause into their disaster-recovery scenarios and stress tests.”
Yet the openness of online forums is also driving change for the better. Mattera highlights the emerging peer-to-peer finance sector as one that stands out for the way in which it is handling transparency.
Another complication is a variance in terms of what is acceptable – culturally or legally – from one country to another, says Mattera. “There is a need to balance transparent reporting of sustainable returns to stakeholders with constraints enforced by competitive advantage and privacy legislation. For example, the United States is much more open than Australia on salary information,” she says.
“Transparency must come with a corporate culture in which it is OK to speak up, one in which you acknowledge the organisation isn't perfect and foster a culture of identifying and managing risks,” says Mattera.
Almond suggests companies adopt different approaches for different audiences and stratify the level of detail available – with a top tier containing key messages followed by additional levels that provide greater detail. To do this, though, companies need a firm grasp on audiences’ wants and desires.
Reputation and revenue
“There is no one-size-fits-all solution to transparency,” she says. “It depends on the environment in which you operate, the people you’re communicating with, your company values and culture. It requires companies to listen to consumers and shareholders and to give serious thought to how they portray their company culture via their corporate reporting. Companies do a lot of talking, but much less in the way of listening to their providers of finance. They need to engage in dialogue with their shareholders and show that they care.”
Transparency isn’t easy. Too little and you risk the wrath of shareholders, too much and it will lead to confusion and opacity. The rewards though, for those companies that get the balance right, can be substantial with the promise of reputational and revenue gains.
To find out more about how your business can communicate more effectively with shareholders, contact Sue Almond or Madeleine Mattera.
Case study: General Electric
GE’s 2013 annual report stretched to 246 pages and was 109,894 words long. “Not a retail investor on planet Earth could get through it,” said GE's chief finance officer Jeffrey Bornstein.
An overhaul meant the 2014 report contained more pages (257) but fewer words (103,484) – it also had 15 introductory pages of charts, on revenues, earnings-per-share growth and employees. Charts are easier for investors to digest than lengthy text, Bornstein reasoned.
This was followed in 2015 by simplifying the annual report’s footnotes, which had stretched to 42,000 words. The 2016 annual report has an introduction and summary that places the company’s financial information in a strategic context, says Bornstein. The report is arranged around topics, with critical information highlighted.
Then, in March 2016, the company launched an annual integrated summary report. This 68-page document gives investors “a comprehensive and concise view of GE” by drawing on information from the company’s annual report, proxy statement and sustainability website.
“When you go online, the fewer clicks you need, the more efficient you are. It’s the same with disclosures. The fewer steps it takes investors to get the necessary information, the better,” said Christoph Pereira, chief corporate, securities, and finance counsel at GE.