FMA’s approach to oversight of financial statements

The Financial Markets Authority (FMA) has recently published its approach to oversight of financial statements, which can be accessed here.

The document provides a summary of the FMA’s work in monitoring compliance with financial reporting obligations by FMC reporting entities and registered schemes (regulated entities) from 2022-2025.

The FMAs areas of interest for the 2022 – 2025 period include:

  • Significant accounting judgements and sources of estimation uncertainty
  • Related party disclosures
  • Non-GAAP financial information
  • Climate-related matters
  • Accounting records.

It is highly recommended that preparers of financial statements that fall within the FMA’s jurisdiction review this document to ensure you are in a position to meet the FMA’s expectations in relation to financial reporting requirements.

The FMA monitor FMC reporting entities to ensure that they:

  • comply with the legislative requirement to file their financial statements in a timely manner
  • prepare reliable, supportable financial statements that comply with the requirements of applicable accounting standards
  • keep proper accounting records supporting application of applicable accounting standards including accounting considerations and position.

When the FMA makes enquiries about an entity’s’ financial statements, they expect that entity to engage constructively and with the aim of providing accurate and complete information to its stakeholders. The FMA also expects the entity to have accounting records readily available on request that support accounting considerations, decisions and assumptions made to support compliance with generally accepted accounting practice in New Zealand. This includes materiality assessment and consideration given to the appropriate level of disclosure in the financial statements.

For more on the above, please contact your local BDO representative.

This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such. The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read. The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in New Zealand to discuss these matters in the context of your particular circumstances.
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