01.09.2021, 10:00

CPA Australia and MIA collaborate to improve understanding of company annual reports

KUALA LUMPUR, MALAYSIA - Media OutReach - 1 September 2021 - CPA Australia and the Malaysian Institute of Accountants (MIA) have collaborated to update two important resources for improving the financial literacy of Malaysian investors and businesses; "A Guide to Understanding Annual Reports: Malaysian Listed Companies" and "A Guide to Understanding Auditing and Assurance: Malaysian Listed Companies."

The two guides have been updated to reflect developments in reporting over the past seven years, including changes in non-financial reporting (such as the Malaysian Code of Corporate Governance 2021 and International Integrated Reporting Framework) and auditor reporting requirements.

CPA Australia Malaysia Country Head Priya Terumalay said the growing complexity of annual reports and auditor's reports highlights the importance of educating users so that they can extract meaning and value from these documents.

"The ability to understand the financial health of a company is a vital skill for investors, entrepreneurs, managers and other business stakeholders. 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 provide much needed clarification and explanation of annual reports and auditor's reports," said Priya.

MIA Chief Executive Officer Dr. Nurmazilah Dato' Mahzan prioritised the growing need for financial literacy to support sustainable economic development. "As the national accountancy body that puts nation building at the forefront, MIA recognises the need to educate shareholders and other providers of capital who are not conversant in financial reporting standards, auditing and assurance matters as well as certain rules and regulations affecting the financial statements."

To further improve corporate reporting towards enhanced business sustainability, Dr. Nurmazilah highlighted the key new development of value reporting, which is the formation of the Value Reporting Foundation and ongoing work on the convergence of integrated reporting and sustainability reporting.

"The end result of value reporting will be more comparable, consistent and reliable information that enables more 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," Nurmazilah said.

The 2021 edition of the "Guide to Understanding Annual Reports: Malaysia Listed Companies" provides an overview of financial statements and a glossary of financial terminology, among other insights. This is particularly relevant during company reporting season when investors are reviewing their investments and making decisions based on their ability to read what's behind the numbers.

The 2021 edition of the "Guide to Understanding Auditing and Assurance: Malaysian Listed Companies" is a plain language guide for shareholders and other stakeholders who are not experts in auditing and assurance, to help them better understand information they receive from auditors about their companies.

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