A survey released by the Association for Investment Management and Research (AIMR) found that over 80% of the analysts and portfolio managers who responded worldwide said that financial statements and footnotes are extremely or very important to their analysis and investment decision making. However, they only give public companies a grade of “C+” for the overall quality of financial reporting and corporate disclosure.

The AIMR 2003 Global Corporate Financial Reporting Quality survey also found that 44% of respondents give companies a “B” but only 1% awarded them an “A”, while 14% give companies a mark of “D” or “F”.

When AIMR last conducted a similar survey, in late 1999, the majority of respondents (56%) rated corporate reporting quality a “B”, and 5% rated it an “A”, while only 37% gave it a “C” or lower.

When asked about the importance of certain types of financial information and the quality of that information, respondents stated that footnote disclosures are just as important as the balance sheet.

According to the survey, areas where there are large gaps between importance and quality are off-balance sheet assets and liabilities, extraordinary, unusual and non-recurring charges, pensions and other retirement benefits.

AIMR says Canadian survey respondents agreed with the rest of the world’s assessment.

“Despite the fact we are in an era of increased regulation and greater scrutiny of the financial reporting that public companies provide, there is clearly room for improvement,” said AIMR senior vice president, Patricia Walters, in a news release.

She added that the AIMR suvey gives public companies “a roadmap for where to focus their attention. The investment community and individual investors are demanding improved quality of financial information and companies should heed this call to action.”

“The message for corporate issuers is clear: when it comes to disclosure, there is no substitute for quality,” said David Yu, co-chair of AIMR’s Canadian advocacy dommittee. “This survey highlights the need to put investor interests first and to deliver the kind of detailed information that leads to informed decisions and greater confidence in our capital markets.”