- Investor confidence levels are lower than during the height of the pandemic.
- Auditors remain the most trusted group in advancing investor protection
- Investors believe financial reports are too complex and digital reporting would help their understanding.
The confidence of Australian and New Zealand retail investors has dropped sharply as global and local economies continue to face disruptions. Chartered Accountants Australia and New Zealand’s (CA ANZ’s) fourth annual Investor Confidence survey reveals that confidence levels are lower than they were even at the height of the pandemic.
Issues such as global political unrest, the ongoing impacts of COVID-19, and climate change have again shaken investor confidence, which had started to recover in 2021.
For the fourth year in a row, independent auditors remained the most trusted group when it came to stakeholders that advance investor protection, followed by regulators, analysts, audit committees and stock exchanges, which highlights the vital role auditors play in the economy.
The survey by CA ANZ, with help from the Center for Audit Quality in the United States, delves into how retail investors feel about capital markets, public companies, financial reporting, the impact of issues such as climate change and crypto-assets, and who they trust to protect their interests.
Investor confidence is vital to the health of economies and capital markets. By understanding what investors are worried about and what information they need, the profession can continue to provide them with the ‘clear view out the front windscreen’ they’re looking for in challenging times.
While confidence in both the global and local economies has fallen, confidence in investing in public companies and in their annual reports remains strong. However, investors find current financial reporting too complicated, and believe mandatory digital reporting would help them find the tailored information they’re looking for. They are also still looking for more consistent reporting on climate change and sustainability, with support for mandatory reporting standards and assurance on these issues remaining strong.
The survey also found that investors lack confidence in investing in crypto-assets, citing a lack of transparency, regulation and understanding of the technology as the primary reasons. Younger investors (between 18-44 years) were much more confident investing in crypto-assets than older investors.
The integrity and robustness of financial reporting and audit are vital to help investors navigate through challenging times. CA ANZ will continue to advocate for the evolution of both standards and the profession to meet the changing information needs of the market and protect the public interest.
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