Level of Compliance on PASs and PFRSs Disclosure Requirements of Publicly-Listed Companies in the Philippines

Abstract

This paper tackled level of compliance on the Philippine Accounting Standards and Philippine Financial Reporting Standards disclosure requirements of selected publicly-listed companies. It seeks to evaluate empirical evidence on compliance of subject companies based on two compliance frameworks namely: reliable financial reporting and complete disclosure requirements. The examination delved into the findings on financial disclosures complied and not complied by selected service and industrial businesses based on their 2009 audited financial statements. It employed the descriptive type of quantitative research since it utilizes a checklist of financial reporting disclosures used as a guide in the review of the 2009 audited reports filed with the Securities and Exchange Commission. The researcher found out that majority of the selected publicly-listed companies did not comply with the PASs and PFRSs notably on the area of presentation of financial statements (PAS 1), financial instrument disclosures (PFRS 7), and rules and regulations covering the form and content of financial statements (SRC Rule 68 & 68.1). Using the chi-square test, it was also found out that there is no significant difference in the non-compliance of selected listed firms on the PASs and PFRSs disclosure requirements when grouped by the type of business. There is a need to enhance high-quality corporate financial reporting capabilities which would require a concerted effort and effective implementation by all parties concerned, top management, financial audit executives, and government regulatory agencies. For future study, it is recommended that a follow-up research be conducted on the improvements of non-compliance rate of the same subject companies with regards on the review results of disclosure requirements for the 2010 audited annual reports. It would also be significant to determine the level of quality and quantity of financial reporting disclosures on the 2010 audited financial statements of publicly-listed companies utilizing a macro level approach across all industries.