CPA Australia and the Malaysian Institute of Accountants (MIA) have collaborated to develop two new guides, to help increase financial literacy and improve understanding of company annual reports for Malaysian investors and businesses. They are:
- A Guide to Understanding Annual Reports: Malaysian Listed Companies
- A Guide to Understanding Auditing and Assurance: Malaysian Listed Companies
They capture new guidance on the statutory and regulatory requirements for annual reports, that considers developments over the past seven years. This includes changes in non-financial reporting (such as the Malaysian Code of Corporate Governance 2021 and the International Integrated Reporting Framework) and auditor reporting requirements.
Priya Terumalay, CPA Australia Malaysia Country Head, said, “The growing complexity of annual reports and auditor’s reports highlights the importance of educating users who write and read them, so that meaning and value can be extracted easily.”
“The ability to interpret financial statements and understand the financial health of a company is a vital skill for investors, entrepreneurs, managers and businesses. It enables them to identify promising opportunities and avoid undue risks, resulting in more strategic economic decisions.”
“The framework for reporting and the requirements for auditing and assurance have evolved in tandem with an increasingly complex, global business environment. These guides offer a roadmap of common content in annual and auditor’s reports, that make them easier to interpret and use,” said Terumalay.
Dr. Nurmazilah Dato’ Mahzan, MIA Chief Executive Officer, acknowledges the need to grow financial literacy to support sustainable economic development.
“As the national accountancy body for accountants in Malaysia, we put the needs of the profession at the forefront. We recognise the increasing need to educate shareholders and other providers of capital, who may not understand financial reporting, audit and assurance standards that maintain the credibility of financial statements.”
Dr. Nurmazilah explains how new developments in value reporting will improve business sustainability, including the formation of the Value Reporting Foundation, and ongoing work to converge integrated reporting and sustainability reporting.
“The end result of improved value reporting will be more comparable, consistent and reliable information that enables holistic decision making by businesses and investors. The move towards value reporting will also facilitate adoption and disclosure of environmental, social and corporate governance (ESG) matters, including climate change risks, which are emerging as the biggest future risk to the sustainability and survival of businesses and society,” said Nurmazilah.
Guides for understanding financial annual reports
The guide helps investors and businesses understand and interpret information found in financial statements and annual reports, so they’re able to make better use of them. It includes a glossary of financial terminology and is particularly relevant during company reporting season, when investments are being reviewed and decisions are being made based on financial performance.
This guide helps company shareholders, or stakeholders who are not experts in the field, to understand company audits and assurance reviews. It explains in plain English, what the value and purpose of auditing and assurance reports is, including current requirements, so that information received from auditors can be used in decision making.
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