In a letter reply to the Accounting Standards Board's (ASB) Exposure Draft at the end of February, IRS chair Diane Faulks urged the guidance to be modified to protect companies from the risks inherent in the predictions the OFR will require them to make.
Regulations requiring firms to give investors an OFR are scheduled to come into effect later this year. Companies will have to give shareholders information on their policies towards employees, customers, suppliers and the environment.
But the ASB has said reviews should have 'a forward-looking orientation' and identify 'those trends and factors relevant to the investors' assessment of the current and future performance of the business'.
Faulks said the IRS was worried about a 'lack of legal safe harbour to protect companies when making such statements'.
Companies that felt legally obliged to fulfil their predictions and promises would, Faulks said, produce 'bland, non-committal, forward-looking statements'.
The IRS also called for more balanced guidance on how companies should use their OFRs to deal with predictions made in previous statements.
Faulks said comment on past predictions should also 'include and cover positives - otherwise companies may begin to see the OFR as having a negative message. If predictive comments have been borne out by subsequent events then companies should be encouraged to communicate that fact'.
The IRS suggested that companies should be given more latitude in deciding what information should be communicated.
It claimed it was 'unreasonable to expect companies to always know what is relevant to investors' evaluation of past results and assessment of their future prospects'.
The OFR framework should also require companies to discuss marketing, sales or branding policy, the IRS said.