Report on cycle four of review of financial reports

The Securities Commission has completed the fourth cycle of its financial reporting surveillance programme.

The Commission reviewed financial reports of 40 issuers with balance dates from 30 June 2005 to 31 March 2006, nine of which were early adopters of New Zealand Equivalents to International Financial Reporting Standards (NZIFRS).

The Commission's chief accountant noted that the level of compliance for the early adopters of NZIFRS was generally good. However, the Commission found that 17 issuers had matters that needed to be addressed. In respect of those 17 issuers, satisfactory agreement was reached on 85 percent of the matters raised, and three significant matters are being followed up separately.

The review also identified issues relating to non-disclosure of waivers in annual reports. One matter was referred to the NZX and two other matters were referred to the NZX Discipline Special Division.

The reviews aim to encourage issuers to improve the quality of their financial reports and thus contribute to the integrity of New Zealand's securities markets.

The Commission has published its report because it believes the information will be useful to issuers who want to improve the quality of their financial reporting - particularly those adopting NZIFRS.

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