Interview with Dato' Lock Peng Kuan and Esther Cheah (2 Feb, 2020 - The Busy Weekly)
Title: Better Transparency in Financial Statements with the Implementation of the New StandardMFRS can Lower Risks of Financial Crisis
We are now in the last phase of the implementation of the Malaysian Financial Reporting Standards (MFRS).
Subsequent to the implementation of MFRS 9, MFRS 15 and MFRS 16 which came into effect in 2018 and 2019 respectively, the upcoming standard that would be hauling the market would be the new MFRS 17.
Many publicly listed companies’ performances took a hit when MFRS 9, MFRS 15 and MFRS 16 were first implemented. The market was taken aback by such a development and many investors questioned the relevance, applicability and justification for the adoption of the new standards.
To understand how the practitioners are viewing this newly adopted standard, The Busy Weekly reached out to Baker Tilly Malaysia’s Audit & Assurance Managing Partner, Dato’ Lock Peng Kuan and Audit & Assurance Partner, Esther Cheah where the two shared their opinion on the importance of the new MFRS.
According to the both of them, the MFRS which was drawn out based on the International Financial Reporting Standards (IFRS) would greatly improve the transparency of financial statements. With the convergence towards MFRS, consistency between financial statements can also be achieved for easier comparison. Undoubtedly, the investors will take some time to get used to the change, but the benefits brought about by the new standards is surely more than what meets the eye. As for corporate managers, while more time and resources are required for the preparation of the financial statement, the process will help them understand their businesses better, which would then come in handy when they need to make a decision for the business’ future.
Most importantly, the adoption of the MFRS can be seen as an effect of a constantly improving market that is slowly marching towards sophistication. The convergence not only lower the risks of a huge financial meltdown, it too helps to regulate the market and control the various new business models that are springing out recently.