Secz applauds disclosures

“We have seen that audit opinion is now appearing on audited accounts and that is a big step forward, although a lot more is expected,” Mr Chinamo said. He said the fact that audit opinion was appearing on the financials of public-listed companies was evidence that some expert would have reviewed them.

The Secz boss said that when companies report their financial results they would be telling the public and shareholders how the company has performed. Against this background, Mr Chinamo said public listed companies needed to appreciate the value and culture of making full financial disclosures.

He said while Secz, which regulates all domestic securities markets, may set rules and regulations on financial disclosure by publicly traded companies, appreciating the importance of financial disclosure would bring better than expected results on disclosure.

Mr Chinamo said companies should feel obligated to make full financial disclosures by simply appreciating the fact that they oversee shareholders’ money. As such, he said full financial disclosure would capacitate investors and shareholders to be able to make informed decisions based on information given to them.

Secz has in the past expressed strong reservations over limited financial disclosure, including failure or reluctance to include auditors’ opinion, by public companies saying the little information made it difficult for investors to make informed decisions.

Companies that are privately owned are not required by law to disclose detailed financial and operating information in most instances.
Such companies enjoy wide latitude in deciding what types of information to make available to the public. Companies that are publicly owned, on the other hand, are subject to detailed disclosure laws about their financial condition, operating results, management compensation, and other areas of their business.

While these disclosure obligations are primarily linked with large publicly traded companies, many smaller companies choose to raise capital by making shares in the company available to investors.