Status of Financial Reporting Practices of Publicly Listed Firms in the Philippines
This article summarizes the results of a study examining the 2001 and 2002 financial statements of publicly listed firms for compliance with financial reporting requirements. The requirements are embodied in the Securities Regulation Code 68 and the Accounting Standards Council Statements of Financial Accounting Standards.
The results of the study showed that most of the listed firms follow most of the prescribed rules. However, only 7 percent of the statements reviewed followed all the rules. Common fractions were lack of disclosures on long term debt, property, plant, and equipment, related party transactions, and accounts and notes receivable. Most grave among the incidents of non-compliance with the rules, with potentially very harmful effects, were accounting treatment violations.
The results also showed marked improvement in financial reporting practices in 2002, compared to 2001.