Disclosure Works Emphasizes the Importance of coping with latest Accounting standards
Al Abri: Disclosure is revealing the key financial facts which reflect the real financial position of the company
Al Qasabi: Updated Accounting Standards Focus on more disclosure requirements
Al Sulaimaniyah: Belief in disclosure enhances the standards of practice
Al Busaidy: Financial Statements are efficient means for taking investment decision
The Capital Market Authority has organized a workshop on the importance of disclosure in stock markets on Wednesday under the patronage of HE Sheikh Abdullah Salim Al Salmi, Executive President of CMA.
The workshop aims to enhancing the level of transparency and disclosure in the stock market and boost awareness of issuers of securities on the processes adopted in disclosure of periodic statements and material information in the stock markets with the participation of speakers from the Sultanate and abroad.
Mohammed Said Al Abri, Acting Vice President, Capital Market Sector at CMA said that CMA attaches special care to disclosure and transparency for being the key principles heeded by stock markets and investment funds and institutions and investment banks locally and globally which is considered the backbone of any financial market due to the important role in mitigating the risks and curbing price volatility.
Al Abri added disclosure means the company represented by its board of directors adopting clear policy reflecting the true financial position of the company.
He added the legislations regulating the Omani capital market support this policy adding that apart from the laws and regulation compliance therewith by all the relevant parties is the key issue as it gives an indication of the market’s efficiency, reliability, confidence, maturity, risk and fairness in dealing with the various segments of investors to protect the rights of market participants.
Professor Gary Tidwell, Senior Advisor at the International Organization of Securities Commissions (IOSC) presented a paper on the importance of disclosure and the general perspective on disclosure explaining that prices in the stock markets are changing and related to numerous aspects including supply and demand and that information which could be financial statements or material information represent the key mover of prices, hence there should be full disclosure of all information including the material information of the institution.
He added that the performance of the company cannot be measured by the general impression but from the financial statements disclosed to the public.
Mr. Tidwell said the financial report reflects the status of the company and the investors must be educated on how to read such reports which would enhance their qualifications in reading the reports and in taking informed investment decisions.
On the paper of Deloitte Ahmed Al Qasabi, Partner in Deloitte said the general idea of the paper is about the importance of disclosure through financial statements which reflect the actual financial position of the company in figures and shows the profits, losses and debt etc.
He added such details are important because investment decisions are based on them as the investor or potential investor rely on them in the investment decision.
Al Qasabi added that the International Accounting Standards Board (IASB) is keen to update the IFRS continuously in line with the challenges imposed by operational processes and the accompanying risks to enhance disclosure practices to provide financial statements in sound and fair manner to all the concerned parties.
He said the paper reviewed the new accounting standards approved by the IASB which came into effect on the first of January which are Standard No. (9) “ Financial Instruments” and Standard No. (15) “Revenues from contracts with customers” as well as Standard (16) “lease contracts” which would come into effect in 2019. The new standards contain more disclosure requirements with regard to classification and reclassification of financial instruments and the provisions for impairment in value, types of revenues and further information on contracts with clients.
Ms Maimouna Al Sulaimaniyah, Legal Counsel at Law & Life said in her paper that importance of disclosure is the fiduciary relationship and that shareholders wait for the information to take their investment decision hence they rely on the accurate and timely process of disclosure .
She tackled the legal infrastructures of the disclosure process in the Omani Capital Market Law.
Al Suliamaniyah reviewed the Sultanate’s practices in corporate governance and the concept and philosophy of disclosure as well as the role of the directors in risk management, institutional performance and business ethics.
Dr. Munthir Al Busaidy, Assistant Professor at the College of Economics and Political Science, Sultan Qaboos University said in his paper on the importance of financial statements in taking investment decision said the paper is a review of research work conducted by SQU and financed by His Majesty Sultan Qaboos bin Said, may Allah protect him, on the importance of financial statements in taking investment decision with focus on investors and those who prepare the financial statements.
He added that the study revealed that the companies with high disclosures are big companies with high profits and vice versa. He added the ownership concentration decreases the level of disclosure and that the big difference between supply and demand prices is indication of ambiguous information and that one party has incorrect information.
The workshop concluded with discussion session with the participation of the speakers.