IOSCO statement on financial reporting and disclosure during economic uncertainty

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15 Nov 2022

The International Organization for Securities Commissions (IOSCO) has released a statement emphasizing issuers’ need for fair, transparent and timely disclosure about impacts of economic uncertainty.

The statement lists the following factors affecting current economic conditions that should be considered:

  • supply chain challenges;
  • on-going impacts of the COVID-19 pandemic;
  • evolving impacts of the conflict in Ukraine;
  • escalating energy supply shortages and costs;
  • labor shortages;
  • inflationary pressures;
  • volatility in currency exchange rates;
  • rising interest rates;
  • changes in monetary and fiscal policies; and
  • other responses from central banks and other government authorities.

Considering these factors might lead to financial statement considerations, going concern considerations, considerations around events after the reporting period, updating and assessing significant judgments, estimates and estimation uncertainty, cybersecurity risk consideration, and considerations around non-GAAP financial measures.

The IOSCO concludes:

We encourage issuers, external auditors, as well as audit committees [...] to be particularly vigilant in times of economic uncertainty in their consideration of how risks and uncertainties that could affect or have affected an issuer’s operations, financial condition, cash flows and prospects can be transparently communicated to investors.

Please click to access the full statement on the IOSCO website.

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