ASIC – Companies ‘hide bad news’
Les Pickett | February 24, 2011
A number of top 200 listed companies fail to properly report their profit results in an effort to “hide bad news” from investors.
This comes in a landmark survey by the corporate regulator. Late last year, The Australian Securities & Investments Commission (ASIC) for the first time reviewed the quality of the disclosures contained in the “Operating and Financial Review” section of the annual reports of 50 of the top 200 listed companies with June 30 balance dates.
ASIC found that a number of companies had disregarded warnings by the regulator in the lead-up to the August annual profit reporting season not to report misleading profit figures that focused on more favourable-looking numbers.
“ASIC’s reviews highlighted a number of areas where entities could have paid greater attention, including presenting information on the key components of results and a meaningful analysis of the underlying drivers of the statutory profit,” ASIC commissioner Michael Dwyer said.
The findings confirm KPMG research released earlier in 2010 that found 84 per cent of the top 100 companies used a measure other than statutory profit in their press releases.
You can read more in this article published in The Australian.
Where do you draw the line on the ethics of “hiding bad news”?
Les Pickett is an adjunct of Victoria University, member of the Australian Government Consultative Committee on Knowledge Capital, member of the International Board of Advisors International Public Management Association for Human Resources, former Deputy Director United Nations System Staff College, Past National President Australian Institute of Training and Development, Past Chairman Executive Board International Federation of Training and Development Organisations and International President Institute of Business Administration.
