Diplock: Accountants critical in enhancing capital markets

The accounting profession's role in enhancing capital markets is a critical one says Securities Commission chairman Jane Diplock.

Speaking at the Confederation of Asia and Pacific Accountants (CAPA), Diplock says the way corporate governance is manifested through financial reporting and disclosure feeds directly into investor confidence, and investor confidence is a key concern of securities regulators everywhere.

She says a critical element of securities regulation is ensuring that the drivers of behaviour of those who control and manage entities, and who influence markets, are aligned with the interests of investors and other stakeholders.

Diplock says financial reporting is of the utmost importance in aligning these interests.

"The role of accountancy is critical to securities markets because financial reporting and disclosure are a vital channel of communication with investors and other stakeholders. They allow a firm to tell its investors and the wider market about its performance."

She says this perspective on accounting has become increasingly important in recent years.

"Accounting has been globally highlighted as a major driver of corporate behaviour, and never was this more obvious than during the global financial crisis.

"Financial reporting, accounting and accounting standards are now widely acknowledged as critical pieces of securities market infrastructure."

Diplock says never is this more important than in cross-border activities and therefore international cooperation in accounting matters is vital.

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