The IOSCO urges securities issuers to communicate the impact of COVID-19 accurately

We analyze the statement issued by the IOSCO on securities issuers communicating information on the impact of the COVID-19 pandemic.

We analyze the statement issued by the IOSCO on securities issuers communicating information on the impact of the COVID-19 pandemic.

The International Organization of Securities Commissions (“IOSCO”) issued a statement in late May highlighting the importance of investors and other stakeholders having accurate, quality information on the impact of COVID-19 on securities issuers’ financial position, results, liquidity and prospects at all times.

The IOSCO underlines that the uncertainty caused by the pandemic (i) has implications on issuers presenting financial and audit reports and (ii) makes it all the more essential for the information that the issuers provide to the market and that is not included in the financial statements to be high quality, i.e., that such information must be reliable, transparent, complete, and specific.

In its statement on the importance of communicating the impact of the COVID-19 pandemic on securities issuers, the IOSCO:

• Urges issuers to balance the flexibility that regulators offer to extend the period for submitting financial information with the responsibility to provide timely and comprehensive financial information to the market, including fair and demonstrable valuations;

• Reiterates the importance of determining the impact of COVID-19 on the amounts included in the financial statements filed by issuers;

• Reminds that the information provided must be transparent, complete and specific for each entity, particularly in the case of relevant estimates;

• Reasserts that, in the current environment, it is important for issuers to correctly assess and take into account the reliability of the adjustment measures on the Non-GAAP system;

• Highlights that the interim financial information provided will have to be specified further subsequently, as will the response from the company’s management, given the changing circumstances; and

• Reminds auditors of their responsibility to report on key audit matters, including how they handle these matters.