No Fraud Detected in Financial Reporting This Year. Deloitte Says…
In contrast to the six percent of listed companies that had issues with their financial reporting in 2009, no indication of fraudulent disclosure has been detected by Deloitte in its latest survey among 130 firms based on their 2010/11 interim reports.
The results of the survey came after the Financial Reporting Council has launched the Panel of Inquiry that would dig up lessons from the 2008 economic crisis, drawing the experiences of both the companies and their auditors. The panel will propose major changes to improve how these firms address going concern and liquidity risk matters.
One remarkable result of the survey is the significant rise in the number of listed companies, now at 95 percent, whose half-yearly financial reporting have openly provided information for investors to assess their business’s financial health.
In addition, the survey further found that 48 percent of companies surveyed have complied with at least the minimum requirements of financial reporting disclosure, including risks and uncertainties compared with 43 percent in 2009.
From the 66 percent of companies in 2009 that voted to hold a review on their financial reporting with auditors, the figure went one mark higher, 67 percent, in their 2010-2011 interim reports.
Access to financial reporting of companies is significant to investors because it gives them insights into the “ short and medium term viability of the business,” said Isobel Sharp, audit partner at Deloitte.
She said Deloitte’s survey only showed that companies are now complying with this requirement based on the guidance released by the Financial Reporting Council in 2009. “Evidence from the survey suggests corporates and investment trusts are broadly doing a good job in complying enough,” she added.
Respondents of the survey included 130 fully listed companies, 30 of them being classified by the London Stock Exchange as industries of equity or non-equity investment instruments. Deloitte obtained their most recent half-yearly financial reporting or interim reports.