Date posted: 6/11/2019

Independent auditors underpin investor confidence

85% of retail investors have some confidence in New Zealand capital markets

In brief

  • This is the first time we’ve surveyed NZ investors to gauge their confidence
  • 90% of retail investors have some confidence in audited financial reporting by public companies
  • Independent auditors are one of the groups retail investors trust most, consistent with the Australian results

The confidence that retail investors have in New Zealand’s capital markets is key to maintaining a healthy economy.

It’s vital to understand the views of these investors because the public’s trust is becoming increasingly harder to earn and maintain and information is subject to more skepticism than ever before.

For the first time, CA ANZ, with the help of the Center for Audit Quality in the United States, has commissioned research into the attitudes of New Zealand retail investors to discover who they trust, what keeps them up at night and how they view New Zealand’s capital markets and companies.

Our survey captured the views of just over 500 retail investors in New Zealand. The results show that they have healthy levels of confidence in New Zealand capital markets and listed companies but are less confident in global capital markets due to concerns about global political uncertainty.  

Ninety percent of retail investors have some level of confidence in the audited financial reports produced by New Zealand public companies. This confidence is driven by the trust that the investors have in independent auditors—the most trusted group for these investors—and other stakeholders in the markets such as regulators, audit committees and analysts.  

“Auditors are ranked number 1 as the most effective entities in advancing investor protection followed by government regulators and oversight, financial analysts and audit committees.” 

We separately surveyed Australian retail investors and they showed similar levels of confidence with 87% of those surveyed having confidence in Australian companies’ audited financial reports.  

Recently it’s become clear that trust can be lost in an instant and that winning it back is extremely difficult. So, while the results of the survey are positive, CA ANZ believes that all the stakeholders in capital markets need to work harder to earn and keep the confidence of retail investors.  

CA ANZ has continuously highlighted the need for audit and reporting to evolve to deliver what the public needs to give them confidence in New Zealand’s capital markets.  

We hope that the research provides useful insights to help inform the evolving discussions around financial reporting, audit and how they contribute to the health of our capital markets.

Related link

Read the Australian Investor Confidence survey report

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