AMSTERDAM- The International Organization of Securities and Exchange (IOSCO) published on February 6, 2008 a statement urging publicly traded companies to provide investors with clear and accurate information on the accounting standards used in the preparation of their accountants.
Michael Prada, Chairman of the IOSCO Technical Committee, said : "investors may assume that all company accounts are generally comparable, even when they are prepared in accordance with quite different generally accepted accounting principles (GAAP) . This commonly occurs where national standards assert that they are based on but do not fully implement International Financial Standards (IFRS)"
He added in order to mitigate against the risk of investors making investment decisions without a full understanding of the bases of financial statements, we are recommending that all publicly traded companies include information which clearly explains the basis on which their accounts have been prepared.
Companies preparing annual and interim financial statements on the basis of national standards that are modified or adopted from IFRS should include at the following statement:
A clear and unambiguous statement of the reporting framework on which the accounting policies are based
A clear statement of the companies accounting policies on all material accounting areas -
An explanation of where the accounting standards that underpin policies can be found -
A statement that explains that the financial statement are in compliance with IFRS as issued by the IASB, if this is the case -
A statement that explains in what regard the standards and the reporting framework used differs from IFRS as issued by the IASB, if this is the case
For more information please visit the following website:www.iosco.org