Interim financial reporting - compliance to local statutory requirements, local regulatory requirements and local and international accounting standards

Abstract

The interim financial information of a company, published in the form of an interim report, provides the users of company reports with timely information for making economic decisions. The preparation and presentation of interim reports in the Republic of South Africa has been regulated for a number of decades by the Companies Act, No 61 of 1973, and the JSE Listing Requirements, which regulate the minimum disclosure requirements for interim reports. There is a general requirement in section 303 of the Companies Act that the interim report should be a fair presentation of the business, results and operations of the company - no guidance is however provided as to what fair presentation implies. Until recently, there were substantial uncertainties regarding which principles should apply in respect of the preparation of, and disclosure in interim reports to ensure that the interim report provides a fair presentation of the entity's financial position, results and changes in financial position. The recent release of international and local standards has given momentum to the process of improving the quality of interim reports. The main objective of the paper is to provide information pertaining to the extent to which South African listed companies (1) adhere to the local relevant statutory and regulatory disclosure requirements regarding interim financial reports and (2) already adhere to international and local accounting standards which become operative for financial statements covering periods beginning on or after 1 January 1999.