Listed corporations to ensure that financial statements comply with approved accounting standards

Kuala Lumpur, 21 June 1999

The Securities Commission (SC) wishes to announce that the Securities Industry (Compliance with Approved Accounting Standards) Regulations 1999 came into force on 18 June 1999. These regulations apply to the financial statements or accounts of listed corporations for the financial period ending on or after 30 June 1999.

The regulations are intended to enhance the quality of information disclosed by listed corporations in their financial statements and to ensure that accounting standards issued by the Malaysian Accounting Standards Board (MASB) are strictly complied with. This is in line with the Commission's developmental efforts to bring about greater accountability, transparency and better corporate governance in the interests of investor protection.

These regulations require every listed corporation, its directors and chief executive to prepare and present its financial statements in accordance with approved accounting standards. The 'approved accounting standards' referred to above are accounting standards which are issued by the MASB under subsection 7(1) of the Financial Reporting Act 1997.

As a matter of policy the Commission has decided that the term 'financial statements' is to encompass the following:
(a) balance sheet;
(b) income statement;
(c) a statement showing either:
(i) all changes in equity; or
(ii) changes in equity other than those arising from capital transactions with owners and distributions to owners;
(d) cash flow statement; and
(e) accounting policies and explanatory notes.
In addition, every director of a listed corporation shall ensure that the accounts of the corporation when laid before the annual general meeting are made out in accordance with approved accounting standards. Failure to comply with these regulations is an offence.

In the event of any failure to comply with approved accounting standards, the Commission may direct a listed corporation, its directors or chief executive:

  • to rectify the relevant financial statements or accounts in order to ensure compliance with approved accounting standards;
  • to provide relevant undertakings to the Commission with regard to compliance with the approved accounting standards; or
  • to make such announcement as the Commission deems fit in relation to the non compliance or the rectification required.

Where the Commission has issued a direction to a listed corporation to rectify the relevant financial statements or accounts, the listed corporation, its directors or chief executive, as the case may be, shall submit the rectified financial statement or accounts to the Commission. The rectified accounts may also be provided to any person as the listed corporation, its directors or chief executive deems fit. Failure to comply with any direction of the Commission or breach of an undertaking provided by the listed corporation, its directors or chief executive is an offence under the regulations.

In ensuring compliance with accounting standards, the Commission will actively initiate scrutiny of the financial statements of listed corporations. The aim of the Commission in this regard is to secure quality financial information. For this reason, enforcement by the Commission will be carried out initially through active discussions and voluntary agreement on the type of remedial actions to be taken by affected corporations.

However failure by the relevant corporations, directors or management to address deficiencies in their financial statements after all these consultative processes will result in the Commission taking appropriate actions against the listed corporations, its directors or management as permitted by law. Such recourse will be sought where the Commission arrives at the conclusion that non-compliance has occurred and that the corporation has failed to provide an acceptable explanation for the non-compliance or that the corporation has failed to take the relevant remedial actions stipulated by the Commission.


Issued on behalf of the Securities Commission. Members of the press requiring assistance may contact the Corporate Affairs Department at tel no. 03-6548513 (Ann Teoh) / 03-6548184 (Azmi Hariss Ibrahim) or fax no.: 03-6515078

Background information:
The Securities Commission (SC), a statutory body reporting to the Minister of Finance, was established under the Securities Commission Act 1993. It is the sole regulatory agency for the regulation and development of capital markets. The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Securities Industry Act 1983 and Futures Industry Act 1993.

More information about the SC is available on its homepage at
about the SC
The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.

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