A possible narrative section harmonisation?, The role of the Practice Statement Management Commentary

The Practice Statement provides a flexible approach to preparation of the management commentary, generating more meaningful disclosure and discussing those matters that are more relevant to the company’s individual circumstances. In this direction the International Accounting Standards Board (IASB) has highlighted some content elements recognised as be-ing fundamental for guaranteeing the usefulness of the management commentary. With reference to these elements, it is interesting to analyse the level of disclosure of the financial reporting. These analyses aim to identify the themes dealt with most extensively by the companies and those that require greater attention so that the narrative section of the fi-nancial statement is, on the one hand, at least consistent with the suggestions of the guideline and, on the other, contains information that is useful for the users. Lastly, in the light of the relevant European Union directives the results of the analysis will help to formulate consid-erations on the ability of the IASB guideline to improve the completeness of the narrative sec-tion. All this is examined in a cross-country dimension: financial reports in Italy and the UK are examined. The content analysis methodology is applied. Within the financial reporting, the management discussion is examined in particular. The analysis is performed considering 2008. This qualitative paper will contribute to the studies on disclosure and usefulness of the information provided.