REPORTING failures can still occur even after all the structures, governance, standards and regulations are in place, says the former president of the Malaysian Institute of Accountants Nik Mohd Hasyudeen Yusoff.
"We are only human, and humans can fail. Structures can only do so much (to ensure corporate governance)," he said.
Nik Mohd was presenting a paper titled "Assessing the Integrity of Current Accounting Practices" at the Asian World Summit in Kuala Lumpur yesterday. The event was organised by the Asian World Summit Sdn Bhd.
"Nevertheless, we cannot take for granted the possibility of reporting failures, but should instead, strive to drive governance to prevent the failures," he added.
Nik Mohd, who is also the chief executive officer of business advisory firm Inovastra, said that as the economy recovers, people will tend to forget what caused the downturn.
He quoted the example of how companies would join the bandwagon, even if it may not be right thing to do, just so as not to lose out on the competition.
Meanwhile, he suggested that in order to strengthen corporate governance, an important question that could be posed to companies even prior to their listing was on their financial reporting.
"May be there is a need to consider the capability of companies to have good financial reporting as part of their listing requisite."
This, he said, may even be included as a section within a company listing prospectus.
"The capabilities are even more imperative due to the complexity in the accounting standards and businesses going forward, especially since the public listed companies hold public money," he said.
As reported in Business Times 30 September 2009
You can download the presentation slides here: