SEBI proposes stricter reporting norms for listed companies

Capital market watchdog, SEBI is mulling to introduce stricter norms for listed companies to improve disclosure and accounting norms. A SEBI’s committee has suggested changes in the way companies make disclosures of earnings as well as placing greater responsibilities on internal audit committees and firms to ensure compliance with accounting norms.

On the proposals getting implemented, these norms would have to be adhered to stay listed on the stock exchanges. The SEBI has also said that chief financial officer (CFO) of a listed entity need not be a chartered accountant. However, it proposed that the appointment should be approved by its audit committee. The audit committee, comprising two thirds of an entity’s independent directors, will be held responsible for top finance officer’s professional credentials.

The committee has also suggested for disclosing audited figures on the balance sheet every six months to streamline the submission and reduce the period for their submission to the stock exchanges. As of now, the norms of disclosing the statements of assets and liabilities are at the end of every financial year. The move will help investors gain a better perspective about a company’s asset-liability position more frequently.

Experts believe that introducing a more consistent and comparable format for quarterly reporting should be on top of the radar in medium term for listed companies in India.