Toronto conference to focus on the issue this week
Unaudited financial information provided by public companies is putting investors at risk and it’s not a small issue.
Chartered Professional Accountants Canada will discuss the issue with other international bodies at the International Financial Reporting Standards (IFRS) conference in Toronto this week.
It says that more than 85% of the information released by public companies has no independent verification, allowing companies to overstate their financial health and mislead investors.
Among the sessions at the conference will be a panel discussion with financial analysts and investors on how to analyze financial statements and non-GAAP earnings.
Making non-GAAP information more effective requires consistent standards and definitions by companies across all accounting periods and by all companies within an industry, according to CFA Society Toronto board member Richard Talbot who will be part of the panel discussion.
The focus of financial statements has shifted over time to the balance sheet while the income statement has been secondary. This means that investors need to do more work to assess the long-term prospects for companies they may invest in.
"This process really accelerated during the credit crisis of 2007-08," Linda Mezon, chair of the Canadian Accounting Standards Board told the CBC.
She added that clarity for both investors and multi-jurisdictional regulators needs to be tackled internationally.
Chartered Professional Accountants Canada will discuss the issue with other international bodies at the International Financial Reporting Standards (IFRS) conference in Toronto this week.
It says that more than 85% of the information released by public companies has no independent verification, allowing companies to overstate their financial health and mislead investors.
Among the sessions at the conference will be a panel discussion with financial analysts and investors on how to analyze financial statements and non-GAAP earnings.
Making non-GAAP information more effective requires consistent standards and definitions by companies across all accounting periods and by all companies within an industry, according to CFA Society Toronto board member Richard Talbot who will be part of the panel discussion.
The focus of financial statements has shifted over time to the balance sheet while the income statement has been secondary. This means that investors need to do more work to assess the long-term prospects for companies they may invest in.
"This process really accelerated during the credit crisis of 2007-08," Linda Mezon, chair of the Canadian Accounting Standards Board told the CBC.
She added that clarity for both investors and multi-jurisdictional regulators needs to be tackled internationally.
