A new guidance paper has been released to help directors better understand and meet their obligations when it comes to financial reporting.
The paper, called Directors Responsibilities for Financial Reporting: What You Need to Know, is designed to help directors avoid the pitfalls of financial reporting.
The work is a joint publication between Chartered Accountants Australia and New Zealand (CA ANZ) and ACCA (the Association of Chartered Certified Accountants).
Liz Stamford, CA ANZ’s General Manager, Policy, said it was an extremely important tool for directors working across the Asia-Pacific and Europe.
“Directors have a number of requirements. First and foremost, they have a duty of care and must give clear information about financial statements to investors and others,” Stamford said.
“This paper is an easy to follow guide which helps answer a range of questions, including, who is responsible for reporting? What are those responsibilities? And when and how do you discharge those responsibilities?
“Our paper outlines what the duty of care means in practice, what’s needed in terms of keeping records, and the various responsibilities in line with preparing financial statements.
“We’re also looking at what must be done in terms of auditing those statements and providing guidance for overseeing internal controls.
“Directors have their own responsibilities and their own member bodies, but as this paper shows, we are playing a leading role in working with them so they better understand their requirements.”
Maggie McGhee, director of Professional Insights at ACCA, said it’s important for directors everywhere to take their responsibilities seriously.
“Not all directors need to be finance professionals, but it’s crucial that directors are engaged and are able to understand and explain the company’s financial reports,” McGhee said.
“As well as important details on practice and process, this paper provides the questions directors need to be asking to make sure the financial reporting process is sound, and the output of that process provides meaningful information to investors and other users.
”It’s a helpful reminder to our members across the world, particularly entrepreneurs and those working in and for small and medium businesses, of this crucial aspect of corporate governance. This global overview of directors’ responsibilities at different stages of the financial reporting process will hopefully provide an opportunity to start a conversation in the boardroom about financial reporting, and corporate reporting in general.
“It provides guidance for members operating in Australia, New Zealand, Hong Kong, Malaysia, Singapore, and the UK.”
The strategic alliance between CA ANZ and ACCA has extended the global voice and reach of both organisations, and benefits to members.
“Together, we represent 800,000 accounting professionals from 181 countries around the world,” said Stamford.
“That makes us one of the largest alliances in the world and gives us a powerful voice. This paper is one of the many ways we are providing new benefits to our members.”
Directors Responsibilities for Financial Reporting: What You Need to Know is available here:Read paper