Ahead of the June 30 reporting period, the Australian Securities and Investments Commission (ASIC) has called on companies and auditors to be prepared and pay particular attention to disclosure.
ASIC chief accountant Lee White said this reporting period will have significant challenges for those involved with preparing and approving financial reports.
“All participants involved with the reporting period will need to approach their roles with a strong understanding of the potential impact of the market turbulence and the liquidity squeeze,” he said.
“It is essential that companies understand the risks they face and adequately assess and measure them, as well as having appropriate responses in place. Disclosure should be a strong focus and priority.”
According to White, the current market turbulence places further emphasis on new accounting standard AASB7 (Financial Instruments: Disclosures), which requires detailed information on the various risks arising from financial instruments.
“Good disclosure from this standard will assist in keeping users of the financial reports well informed,” White said.
