Report standards

Press, 21 November 1987, Page 31

Report standards

PA Wellington The standard of accounting practices in public companies should be higher, the Minister of Justice, Mr Palmer, has told Parliament. A National member of Parliament, Mr Paul East (Rotorua), had asked Mr Palmer what was being done to control the activities of public companies, to protect small investors. "False expectations have been built up by public companies through exaggerated reporting, and small investors as a result have in many instances lost their life savings,” he said. Mr Palmer said the Securities Commission was review-

ing the law and practice of financial reporting, and would report its findings to him. “Indeed the commission has already done a lot of work that has led to changes of accounting.” For example, changes to standard accounting practices relating to cash flows, which came into effect on January 1 next year, reflected a commission report on the Perry Dines Corporation published last year. “I think that some of the practices which have been occurring in recent time and which have come to public attention are not good enough and the standards need to be higher,” Mr Palmer said.