MD&A – Counterpart to or Distraction from Financial Reporting
MD&A content has been an ongoing topic of recent debate with the views divided on the impact that regulated content has on the quality of the MD&A. Complexity has amplified as a result of emerging issues of particular importance to investors such as transition to IFRS, the environment and executive compensation. This paper examines companies’ compliance with requirements of the Canadian Securities Administrators for MD&A disclosures, and aims to advance understand on whether following CSA requirements positively influences the quality of the MD&A. The analysis shows that overall, companies provide quality information to investors as MD&A disclosures meet, and often exceed CSA requirements. However, incorporating marketing elements in the MD&A is sometimes present. Environmental and executive compensation disclosures are two areas that are currently underrepresented in the MD&A. Nevertheless, companies are well positioned to closely follow principles and the framework of the IFRS Practice Statement on Management Commentary issued by the International Accounting Standards Board (IASB).
|Date of creation:||Jan 2011|
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