SecCom finds problems with financial reporting
SecCom finds problems in nearly 70% of annual reports surveyed.
The Securities Commission has found problems in the annual reports of nearly 70% of companies surveyed in its latest Review of Financial Reporting by Issuers.
The review, the commission’s last under the Financial Reporting Surveillance Programme before it merges into the Financial Markets Authority, looked at reports for the periods ended March 31 to July 31 2010.
It examined 25 annual reports including 14 entities listed on the NZX, two listed on the Unlisted trading platform and nine not listed on any exchange.
The entities reviewed included four non-bank deposit takers and five KiwiSaver schemes.
Of the 25 sampled reports the Securities Commission wrote to 17 issuers about a total of 32 matters.
Of these 32 matters agreement was reached in 28 (88%), while a second letter was sent in two cases and other follow-up action was taken in two others.
Matters included financial instruments, such as inadequate disclosure of assumptions used in valuations, valuation of shares above their quoted price and non-disclosure of the liquidity risk information used by management.
Other matters raised by the Securities Commission included goodwill impairment testing, alternative performance measures, failure to provide separate financial statements for segregated funds within a scheme and revaluations of property, plant and equipment.
The latest review was an improvement on previous results since the NZ IFRS accounting system was introduced in 2007.
Since then more than 80% of issuers have received letters from the Securities Commission in most reviews.
Niko Kloeten
Thu, 28 Apr 2011
Thu, 28 Apr 2011
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SecCom finds problems with financial reporting
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