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HKEx Publishes Results of Review of Listing Issuers’ Financial Reports

Regulatory
13 Aug 2010

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), today (Friday) published a report summarising key observations and findings from its review of 100 financial reports released by listed issuers in 2008 and 2009. 

In discharging part of its regulatory function, the Exchange monitors compliance with the disclosure requirements of the Listing Rules and accounting standards by continuously reviewing, on a sample basis, the financial reports released by issuers.

To enhance transparency and encourage high standards of financial disclosure, the Exchange releases key findings and observations from its reviews on a regular basis.  The report published today, the Exchange’s second report of key findings and observations, covers the Exchange’s review programme of annual, interim and quarterly reports released by issuers between October 2008 and September 2009.

During the review process, the Exchange sent 98 letters to issuers. The letters contained more than 400 enquiries and observations, including requests for explanations of possible non-compliance.  Where omitted disclosures were regarded as less significant, the Exchange obtained confirmation from issuers that the required information would be provided in future financial reports.   Except for four referrals to the Financial Reporting Council to consider further enquiry and investigation of possible accounting and auditing irregularities and one caution letter to an issuer, there were no significant breaches of the Listing Rules or accounting standards that would render the financial statements false or misleading or would require a restatement or reissue of financial statements or warrant disciplinary action by the Listing Committee.  

The results of the review indicated that some disclosures could be improved.  Therefore, the Exchange encourages directors and other persons responsible for financial reporting to review and improve their existing financial reporting systems and take note of the matters discussed in the report.

The report is available under the “Rules & Regulations – Rules and Guidance on Listing Matters – Guidance Materials – Financial reporting matters” section of the HKEx website.


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Updated 13 Aug 2010