Financial statements are important sources of information for investors to make investment decisions and assess how effectively boards and management discharge their stewardship role, create value and promote the long term success of companies. However, the usefulness of financial statements is dependent on their quality, and management, directors, auditors, investors, regulators and other stakeholders all play important roles in ensuring the quality of financial statements. External auditors, through their assurance role, play a particularly important role in improving trust in financial statements.
The importance of high quality financial reporting and audit to good corporate governance is recognised in the G20/OECD Principles of Corporate Governance through the “Disclosure and Transparency” Principle. For example, under this Principle, there should be disclosure of material information on the “financial and operating results of the company”, “information should be prepared and disclosed in accordance with high quality standards of accounting and financial and non-financial reporting”, and “an annual audit should be conducted by an independent, competent and qualified, auditor in accordance with high-quality auditing standards”.
In April 2016, ACRA, ISCA and the NUS Business School launched a survey of investors’ views of financial reporting, audit and corporate governance, including regulatory initiatives in Singapore to improve these areas. As investors are a key stakeholder group, their views on financial reporting, audit and corporate governance are important inputs into regulatory and market initiatives.
Please clickhereto read the full “Into the Minds of Investors” report.
