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This article examines rule amendments issued by the US Securities and Exchange Commission in November 2020, as part of the SEC’s ongoing “disclosure effectiveness initiative”, that revise in significant respects the requirements for financial disclosures presented in SEC filings as Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This article provides an in-depth analysis of the rule amendments in the context of contrasting perspectives expressed by the SEC, individual SEC Commissioners who dissented from adoption of the amendments, and market participants regarding the merits of the SEC’s movement away from prescriptive disclosure requirements towards a more principles-based approach to disclosure.

Although the SEC’s rules have long reflected a mix of principles-based and prescriptive disclosure elements, the principles-based emphasis in this latest stage of the SEC’s disclosure modernization project accords the managements of filing companies greater latitude to determine whether financial information is material to investors and how such information should be presented.

This article provides expert guidance on a major new SEC disclosure development from an experienced securities lawyer.

Prior to the adoption of an IFRS based reporting framework in Malaysia, no binding standard governing goodwill had ever been implemented. After several decades in which a laissez faire approach to the problem represented the dominant paradigm, the highly prescriptive and technical provisions of FRS 136 – Impairment of Assets represent a very substantial variation from past practice. This in turn gives rise to questions about the extent to which Malaysian companies and their auditors have fared during the process of transition to a complex new reporting regime and in consequence to the quality and consistency of reports produced pursuant to that new regime. Thus, FRS 136 presents an opportunity to interrogate the level of compliance and disclosure quality exhibited by first‐time reporting entities – and by extension, yield insights into the implications of and challenges associated with transition to new and complex reporting regimes. Focussing specifically on compliance and disclosure quality relating to the highly detailed requirements set out in FRS 136, this paper finds evidence that the quality of the responses by large listed Malaysian firms has indeed been mixed, with many firms producing financial reports that have failed to meet the mark of the new standard. While the move by MASB to adopt IFRSs is a reflection of Malaysia’s commitment to align with global accounting standards in order to achieve harmonization with international practice, these findings suggest that continued improvement will be required by Malaysian companies and their auditors before Malaysian practice is truly aligned to the international standard.

Part IV provides readers with the extant requirements for the application of materiality to recognition, measurement, presentation, and disclosure in the financial statements. This part also includes a detailed critical review of the recent Practice Statement on materiality, the FASB’s proposed ASU on the notes and the amendments to the Conceptual Framework proposed by the IASB and the FASB.

The part expands to issues that are typical of Management Commentary, including the SEC guidance on materiality in Management Discussion and Analysis.

It informs about the complexities and subtle differences between financial statements and bookkeeping and the different standards of reasonableness versus materiality.

A section moves from materiality to material misstatements and covers the application of materiality in auditing.

Another section goes in depth on internal control over financial reporting, showing the linkages between materiality and risk appetite and risk tolerance and the related application guidance.

Recently enacted Australian law governing financial services requires investment managers to report to what extent social considerations are employed in portfolio construction. Using the principal‐agent framework as an interpretive backdrop, the paper aims to analyse institutional responses to the introduction of the legislation.

The paper distinguishes formal, claimed accountabilities from practised accountabilities. It identifies practised accountabilities by examining legislative requirements, noting responses of mainstream investment banking institutions in the period of legislative development, interviewing a sample of investment managers, and examining a sample of information disclosures issued in the initial period of the legislation.

The paper finds that while appeasing investment managers and the lobby group that urged for the disclosures, the non‐prescriptive regulations promise little in terms of promoting the integrity of management practices. Initial disclosures were poor, providing little basis for comparability.

The paper provides a basis to investigate accountabilities in service‐based contractual relationships, particularly managed investments.

The paper introduces a new research field: social reporting in financial services. The period reviewed was the initial reporting period in which Australian practitioners were required to issue social reports. Counterpart European legislation has not attracted scholarly attention. A contribution is made to critical research on social investment.

To provide a practical look at the European Union Market Abuse Regulation (Regulation EU No. 596/2014) (“MAR”) and some of its uncertainties, particularly the issue of its wide reaching jurisdictional scope.

The article takes a three pillar approach covering the following: a brief discursive overview of MAR, consideration of some of its uncertainties and key areas of controversy, and a detailed consideration of the jurisdictional scope of MAR.

Many questions and considerations about MAR remain, particularly those regarding how the investment recommendations requirements will be met in practice, most notably in respect of sales notes. Further, additional extensive record keeping obligations and prescriptive market soundings procedures are now expected of firms in order to show the legitimacy of their activities. In addition, the geographical scope of MAR is wide and all encompassing. Whilst its market manipulation, improper disclosure and insider dealing provisions must undoubtedly be adhered to worldwide, it remains to be seen how far the conduct requirements included in MAR will be implemented by non EU firms.

Consolidation and detailed consideration of the most common questions being asked in the market by market participants and issuers on The Market Abuse Regulation in the run up to its implementation. Practical guidance from experienced financial regulatory lawyers.

The purpose of this study is to explore the degree of compliance of a sample of European Union (EU) listed groups with the International Financial Reporting Standard 15 (IFRS 15) mandatory disclosures in two specific sectors, namely, telecommunication and construction.

To carry out this research, the authors selected 22 annual reports for the year 2018. The authors created and completed a datasheet based on a close review of the IFRS 15 disclosure requirements. A content analysis of the selected annual reports was then performed.

The results show that the sampled groups do not fully comply with the IFRS 15 mandatory disclosures and the degree of compliance differs between the two investigated sectors.

To the best of the authors’ knowledge, this study explores, for the first-time, the degree of compliance with the IFRS 15 mandatory disclosures, by focusing on a cross-country sample of EU listed groups.

This article seeks to unravel the mechanisms through which financial actors agreed upon a sustainability accounting standard without financializing social and environmental issues, i.e. assigning a monetary value to sustainability.

The article examines the Reporting and Assessment Framework created by the United Nations Principles for Responsible Investment (UN-PRI), the leading reporting sustainability framework in the asset management industry. It relies on a longitudinal case study that draws upon interviews, participant observation, and archival data.

The article demonstrates that the conception of the framework was a funnelling process of sustainability valuation comprising two co-constituted mechanisms: a process of valorization – judging what is deemed of value – and a process of evaluation – agreeing on how to assess value. This valuation process was unfolded by creating the framework, thanks to two enabling conditions: the creation of non-prescriptive evaluative criteria that avoided financialization and the valuation support of an enabling organization.

The article helps understand how an industry can encompass the diversity of motives and practices associated with the adoption of sustainability by its economic actors while suggesting a common framework to report on and assess those practices. It uncovers alternatives to the financialization process of sustainability accounting standards. The article also offers insights into the advantages and inconveniences of such a framework. The article enriches the literature in the sociology of valuation, financialization, and sustainability accounting.

This paper aims to examine whether firms with high information asymmetry disclose more information under a continuous disclosure regime, and, second, the paper examines whether continuous disclosures reduce information asymmetry.

The study models relations between continuous disclosures and information asymmetry using ordinary least squares regression and two-stage least squares regression.

The study finds firms with high information asymmetry disclose more information. Further, the study finds that disclosure in the presence of high information asymmetry increases asymmetry. Finally, while bad news increases information asymmetry, the disclosure of firm-specific good and bad news is associated with reduced information asymmetry.

The paper identifies conditions under which Continuous Disclosure Regime increases information in markets and influences information asymmetry.

Purpose – This paper extends the literature in the environmental disclosure area by examining annual report disclosure practices of Australian companies within the combined voluntary and mandatory environmental disclosure system. Design/methodology/approach – Content analysis was used to investigate the environmental disclosures over three consecutive years in the annual reports of companies that would be subject to environmental regulation and/or perceived to be environmentally sensitive. Findings – The study finds that Australian listed companies have a propensity to disclose higher levels of positive environmental disclosures in the voluntary sections of the annual report than in the statutory sections of the annual report. Research limitations/implications – These results suggest that regulatory authorities may need to acknowledge the usefulness of mandatory disclosure requirements as a potential means of counter‐balancing the voluntary disclosure system. It has been argued that the annual report is not the sole disclosure medium used by companies Further research may not only investigate these issues but also add weight to arguments for more environmental accountability. Practical implications – The results suggest that companies adopt different disclosure approaches when the disclosures are potentially under surveillance or increased scrutiny via legislated environmental disclosure requirements. Originality value – This research provides evidence that companies continue to use greater levels of self‐puffery within a voluntary reporting environment than within a mandatory reporting environment, and suggests that stakeholders may be more likely to receive information that is less favourable to the corporation (and potentially more decision‐useful to stakeholders) within a legislated disclosure environment.