Public companies have been granted leeway in filing their financial statements due to the effects of the Covid-19 outbreak, but global securities regulators stress that it’s also critical for investors to receive high-quality disclosure.
The International Organization of Securities Commissions (IOSCO) issued a statement on Friday reiterating that it’s important for issuers to provide investors with disclosure about the impact of the pandemic on their operations and financial circumstances.
“The pandemic and the uncertainty it has caused have material implications for financial reporting and auditing, including issuers’ disclosures of current and reliable information material to investment decisions,” the group of global regulators said.
While industry watchdogs have provided companies with more time to file their financials, IOSCO said that companies also have a responsibility to “provide timely and comprehensive financial information that includes reasonable and supportable judgments.”
In its statement, IOSCO highlighted the importance of companies providing disclosure about the impact of Covid-19 on their financials. The group stressed that disclosures should be specific and transparent, particularly when they require companies to make judgments and use estimates.
“In the current environment, it is important that issuers are mindful of the elements of reliable and informative non-GAAP measures,” the statement said.
IOSCO added that companies’ interim financials should provide “more robust disclosures of material information and management’s response to the changing circumstances.”
Finally, the group noted that, given that it may be more difficult for companies to provide disclosure outside of their required financial statements, this makes, “high quality disclosures that much more important.”