Search results

For years, interim financial reports in South Africa were regulated by the South African Companies Act No. 61 of 1973 (as amended) (i.e. statutory requirements) and by the Johannesburg Stock Exchange (JSE) Listing Requirements (i.e. regulatory requirements) only. However, on the international front, major progress was being made in respect of improving the quality of interim financial reporting. South Africa soon followed suit and issued its own accounting statement, AC 127, which is based on the international standard (IAS 34). The School of Accountancy at the University of Pretoria commenced a research project on interim financial reporting in 1997 to investigate compliance with related reporting requirements. This paper is a product of the project. The purpose of the study reported in this paper was to: [a] Compare the requirements stated in IAS 34 and AC 127 with the local regulatory and statutory requirements, to determine whether these requirements are duplicated and to establish in which respect the accounting standards require additional disclosure requirements. [b] Provide an overview of the extent to which companies listed on the JSE adhered to IAS 34 and AC 127 and complied with regulatory and statutory requirements in their interim financial reports in the period 1997 to 1999. [c] Make recommendations regarding the improvement of local statutory and regulatory disclosure requirements.

This paper is motivated by the Financial Markets Authority’s (FMA) investigation into reporting delays of New Zealand issuers. The purpose of this paper is to provide regulators with systematic evidence on firm specific characteristics associated with reporting delay. The paper examines the audit report lag (ARL), the financial report lag and the corresponding interim report lags for a large sample of New Zealand listed firms.

Because of the small sample we report bivariate correlations. Together with OLS regression, we examine the association between reporting delay and firm characteristics (e.g., size, complexity, governance) that capture the supply and demand for timely audited financial reports. We choose a period immediately prior to the FMA enforcement of reporting delays to capture the voluntary choice of reporting timeliness by managers.

The audit lag (i.e. balance date to preliminary announcement to the NZX) is longer than the report lag (i.e. preliminary announcement date to the issuance of the report to the NZX). We find that audit risk factors (leverage and finance firms) and busy reporting period are associated with longer audit lag. Whereas, having a Big 4 auditor and an interim review reduces annual audit lag. Investor demand factors are associated with a shorter report lag. Firms with a loss and more segments have a shorter report lag, while firms with high market to book ratio have a longer report lag. These are consistent with agency and proprietary cost explanations. The interim report lag is only seven days shorter than the annual lag. The determinants of annual report lag provide weak explanations for the interim report lags.

Although all listed companies are sampled, the small sample size reduces the power of the analysis and may limit finding significant results at conventional levels.

The factors associated with reporting delays could be used by regulators as red flags to identify abnormal reporting delays. Interim reporting lags appear excessively relative to annual report lags. Therefore, regulators should investigate the reasons for the lack of timeliness of interim reports.

Report timeliness is an important, but often overlooked, component of accounting quality. The major social implication is that timely reporting reduces information asymmetry between managers and shareholders and other stakeholders. Making better, timelier decisions ought to increase the wealth and welfare of investors and other stakeholders.

There are many studies on reporting delay. However, prior evidence on reporting delay in New Zealand is pre-IFRS and pre-recent regulatory reforms (such as the formation of the FMA). Hence, our contribution is to provide more contemporary-relevant evidence. We also distinguish between ARL and the financial report lag and found that different firm characteristics drive these lags. We also examine the interim reporting lag.

Part V analyzes the details of how to assess materiality. It first tackles qualitative versus quantitative criteria and the role of professional judgment. It then analyzes the selection of quantitative threshold, to expand to the choice of benchmarks. It contrasts the whole financial statements with subaggregates, line items, and components.

Specific sections contrast IASB, FASB, SEC, and other guidance on materiality applied to comparative information, interim reporting, and segment reporting.

The section on estimates mingles complex guidance coming from accounting, auditing, and internal control over financial reporting to explain how the management can improve its assessment of materiality concerning estimates.

After explaining the techniques to move from individual to cumulative misstatements, the part tackles verification ex post, and finally summarizes the intricacies of whether immaterial misstatements are permissible and their consequences.

This study aims to examine the levels of interim financial reporting (IR) disclosure by listed firms in the Asia-Pacific region and factors influencing these disclosure levels.

Drawing on a sample of 700 interim reports issued in 2012 by the top 100 listed firms in seven Asia-Pacific countries (Australia, Hong Kong, Malaysia, Singapore, the Philippines, Thailand and Vietnam), the author constructed a disclosure index consisting of disclosure items commonly required across the sample countries. Using this index, the study measures the extent to which listed firms in the Asia-Pacific Region comply with IR disclosure requirements. The study performs ordinary least square regression to investigate the influence of the four country-level factors including international financial reporting standard (IFRS) adoption, audit review, reporting frequency and reporting lag.

This research documents that IR disclosure varies significantly across the region. The IR disclosure levels are positively associated with IFRS adoption, audit review and mandatory of quarterly reporting, but negatively associated with reporting lag.

IR regulation varies across the Asia-Pacific region, but there is no existing research on the country-level factors influencing IR disclosure practices. To the best of the author’s knowledge, this is the first paper providing some insights into IR disclosure levels by listed firms in the region. It also contributes to the disclosure literature by providing empirical evidence on the country-level factors influencing these disclosure levels. Deriving from the findings, the authors offer recommendations for regulators, investors and listed firms on the issue of reviewing the regulation, using information and preparing IR.

Globally, there are more than 16 stock markets that are undergoing drastic enough growth to be considered emerging. These markets possess characteristics very distinct from those which may be characterised as mature. This paper compares interim reporting regimes in two markets with these different characteristics. The regulatory environment within the USA represents a mature market, and the Finnish regulatory environment depicts an emerging market. First, historical developments are detailed for both of these contexts. Similarities and differences in the regulation are systematically pointed out. Second, the potential consequences of some differences in regulatory schemes are discussed. Special emphasis is placed on the influences these variations have on both legislators and the producers of interim reports. This paper should offer valuable insights for the regulation of a large number of emerging markets.

This paper provides insight into the importance of interim reports of UK listed companies to investment analysts. The primary objective of financial reporting is assumed to be the provision of information to help investors make rational investment decisions. In this study, a survey of financial analysts and fund managers was undertaken to determine their perception of the importance of 113 items disclosed in interim reports. The main findings demonstrate that both financial analysts and fund managers perceive disclosure items in the profit and loss account and cash flow statement sections as the most important. Additionally, the results show that there are similarities between financial analysts and fund managers with regard to the relative usefulness of items in the profit and loss account, balance sheet, cash flow statements and accounting policies and notes. However, significant differences exist between the two groups with respect to management commentary information. Overall, the conclusion that can be drawn from these results is that increased disclosure in interim reports is useful to investment analysts. These findings are important for policy‐makers and companies as the views of investment analysts (as users of financial reports) are essential in the attempt to improve disclosure.

The interim report was introduced by the Stock Exchange in 1964 and, despite its importance, remains lightly regulated. Despite the lack of regulatory pressures there have been significant changes in practice and one has been the appearance of the auditors’ review report. Compares various features of the interim reports of 138 companies for 1992 and 1997. Demonstrates the changes which have taken place over that period and seeks to explain the variables which are most closely associated with the presence of an auditors’ review report. Finds that it is the larger companies which are most likely to publish an auditors’ review report. There is also evidence that the presence of auditor involvement is not associated with delay in the issue of interim reports, but is associated with the voluntary disclosure of additional information. Suggests that the practice of publishing an auditors’ review report is likely to increase and that it is appropriate for the Auditing Practices Board to issue relevant guidance on the subject.

The purpose of this paper is to contribute to the existing disclosure literature by examining the determinants of narrative risk information in the interim reports for a sample of UK non‐financial companies.

This study uses the manual content analysis to measure the level of risk information in interim report narrative sections prepared by 72 UK companies. It also uses the ordinary least squares regression analysis to examine the impact of firm‐specific characteristics and corporate governance mechanisms on narrative risk disclosures.

The empirical analysis shows that large firms are more likely to disclose more risk information in the narrative sections of interim reports. In addition, the analysis shows that industry activity type is positively associated with levels of narrative risk disclosure in interim reports. Finally, the analysis shows statistically insignificant impact of other firm‐specific characteristics (liquidity, gearing, profitability, and cross‐listing) and corporate governance mechanisms on narrative risk disclosure.

The study's findings have practical implications. It informs investors about the characteristics of UK companies that disclose risk information in their interim reports. For example, the findings show that narrative risk disclosures are affected by firm size and industry type rather than firms' risk levels (e.g. financing risk measured by the gearing ratio or liquidity risk measured by lower liquidity ratios). Practical implications for managers from these findings are that, in order to keep investors satisfied, companies with high levels of financing and liquidity risks should look at investors' demands for risk disclosure. This will help investors when making their investment decisions.

The determinants of narrative risk disclosure in interim reports have not been explored so clearly in prior research and, therefore, this paper is the first of its kind to examine this research issue for a sample of UK companies.

This study investigates the association between interim audits and final audits. The authors focus on whether interim audits affect the audit time lag and the risk of restatement associated with final audits.

Two regression models are established to empirically test if an interim audit helps to reduce the audit time lag and the restatement risk on annual reports based on a sample of Chinese listed firms.

The authors find that performing interim audits helps to reduce the audit time lag. This result suggests that final audits can be completed more efficiently when interim audits are performed during the same period. The authors also find that the decision to audit interim reports is associated with a lower risk of restating annual reports. The lower risk of restatement in turn suggests more effective final audit results.

Together, the results from this study demonstrate that interim audits could benefit final audits, which highlight the value and importance of the continuous auditing.

This study examines the timeliness of quarterly financial reports published by companies listed on the Kuala Lumpur Stock Exchange (KLSE). In addition, this study extends prior research by determining the association between timeliness and each of the following company attributes ‐ size, profitability, growth and capital structure. An analysis of 117 quarterly reports ended on 30 September 2001 reveals that all, except one company reported within an allowable reporting lag of two months. However, a large number of companies were making the most of the time given to announce their quarterly reports. The study also provides evidence that there is a significant association between timeliness and each of the four company attributes, and the association is in the hypothesised direction. Plausible explanations for these findings are provided. The findings may provide some implications for future regulations and research regarding the timeliness of financial reporting in Malaysia.