Media Release

Uncertainty in global financial markets a key issue for year-end reporting, says Institute

The impact of the European debt crisis on global financial markets should be a key area of consideration for year-end financial statement preparation, according to the Institute of Chartered Accountants in Australia (the Institute).

In its latest reporting tool, Essential guidance for the December 2011 reporting season, the Institute identifies key issues that may affect financial statement preparers, auditors and audit committees, including the price on carbon and the European debt crisis.

The Institute’s executive general manager – members, Lee White, says, “the debt crisis in Europe has the potential to have far worse consequences than the GFC.

“When preparing year-end financial statements, consideration should be given to the impact of market volatility as a result of the Euro crisis.”

The guidance tool discusses the impact of the crisis on equity markets, exchange rates and commodity prices.

Other issues identified, with supporting commentary, include: carbon price, communication on governance issues, the minerals resource rent tax, and regulatory focus areas.

“For the SME sector in particular, even if businesses are not directly impacted by the carbon price, they will need to consider the flow-through effect on the supply chain and broader economy,” Mr White says.

Bi-annually the Institute provides essential guidance to preparers, auditors and audit committees to assist them in their roles as professionals. This is part of an ongoing body of work produced by the Institute that examines the issues that have impacted financial reporting periods, while also, examining areas that require attention during the next six months.

Article last Updated 21 December 2011