The creation of financial statements that include quantitative data from prior years, such as an income statement or balance sheet, is the first step in the statutory reporting process. Businesses are required to ensure that their financial records adhere to any applicable accounting standards, such as IFRS or GAAP. When submitting their documents for assessment, businesses must also follow any further guidelines issued by regulatory bodies.

Strategies For Centralized Global Statutory Reporting

These often go beyond basic statutory reports, requiring additional data to ensure compliance with regulations in that sector . Only companies in certain industries (banking, energy, pharma, etc.) or public companies face these extra obligations. From my experience, companies https://www.bookstime.com/ that prioritize accurate and timely statutory reporting often enjoy better relationships with investors, lenders, and regulators. On the other hand, failing to comply with reporting requirements can lead to penalties, legal issues, and reputational damage. While statutory reporting ensures transparency, compliance, and accountability, organizations often face several challenges in meeting statutory reporting requirements effectively and efficiently.

Legal

Review around expanded regulatory reporting has continued in APAC and Latin America and as new mandates are enacted, companies need to manage these Accounting Periods and Methods new, often unfamiliar requirements. It is expected that while these territories lag behind, new mandates will soon drive these geographies to align to higher global standards for greater transparency, especially in the capital markets. The income statement, or profit and loss account, details the company’s revenues, expenses, and profits over a financial period. Analyzing trends in revenue growth and expense management helps stakeholders gauge performance and make informed decisions. For instance, a consistent increase in net profit margin may indicate effective cost control and revenue strategies.

• Unlike GAAP, which provides a more general framework for financial reporting, SAP is tailored to meet the specific needs and regulatory requirements of certain sectors.
• The preparation of statutory financial reporting is closely related to the role of two institutions.
• It is why reporting automation tools are becoming widely adopted by many teams to make a clean distinction between these deliverables.
• This information serves as a financial roadmap, guiding stakeholders in understanding the organisation’s financial performance and position.
• The U.S. GAAP guidance can be 1) adopted; 2) adopted with modification; or 3) rejected for statutory accounting.
• Each year, new requirements for regulatory and statutory reporting and expanded disclosures further challenge the Office of Finance around the globe.
• Your company’s statutory reporting obligations don’t end with the SEC — operating in the global marketplace means also being aware of any other compliance measures you need to take across borders.

Audits

Some jurisdictions require companies to have their financial statements audited by independent auditors before filing them with authorities. It’s an effective way to ensure that financial statements accurately reflect the performance and financial position of the organization. Statutory reporting types include financial reports, tax filings, regulatory disclosures,etc, to meet legal requirements.

Considering aspects like price, scalability, usability, integrations, analytics capabilities, and more can help you choose a platform that satisfies both the expectations of the present and expected future demands. Companies that take these factors into account can benefit from increased automation-related efficiency improvements and enhanced risk management for global regulatory compliance. Cost, scalability, ease of use, and integration capabilities should all be considered when choosing a technological solution for statutory reporting. Software packages may offer a variety of characteristics that change depending on the requirements of a company.

• That’s why progressive firms are moving toward real-time reporting systems and keeping Excel as their compliance safety net.
• These platforms also can store and track changes in real time to ensure there are no duplicated efforts or lost data.
• This allows companies to quickly obtain a deeper understanding of their financial operations across many marketplaces.
• Save time with automatic updates using the power of cloud technology, and increase accuracy with automatic rounding, numbering, referencing, and roll-forward processes.
• The foundation of statutory reporting is a specialized accounting framework known as Statutory Accounting Principles (SAP), designed to meet the unique needs of regulators.
• This streamlined reporting processes and ensured compliance with various regulatory bodies.
• Your virtual data room should provide secured workspaces to manage Excel spreadsheets and other documentation.

An example of one of these internationally recognised standards is the International Financial Reporting Standards, or the IFRS. The development of financial reporting in Indonesia by the year 2012 was a crucial development because the application of IFRS convergence has been completed and implemented in large companies in Indonesia. This is the first step for companies in Indonesia to compete with firms in other countries in the global competition. Application of IFRS convergence strategy by Indonesia is to facilitate adjustment in a variety of industry sectors, and understand its application in each transaction and their company’s financial reporting.

Security and Data Protection

However, if the team has too much agency, there is a risk of operations that go unchecked. If there is questionable data, teams may try to mitigate the risk or hide it from other stakeholders. Even if the https://www.bookstime.com/articles/statutory-reporting data is not as expected, it is important that all stakeholders are informed, to make the best business decisions given the environment. Statutory reporting can actually help internal oversight by encouraging regular data reporting, transparency and compliance.

How ESG-embedded statutory reporting solutions can protect your business

The introduction gives a general overview of the significance and difficulty of statutory reporting, which is further discussed in the heading after that. For CFOs and other finance leaders, comprehending statutory reporting is a crucial step in ensuring compliance with international rules. To avoid any potential errors and maintain compliance with applicable requirements, organizations must be aware of the complexities involved with statutory reporting.

Putting all your financial statements in a secure VDR not only offers an added element of security, but it can save your company time and money throughout the often tedious process of financial reporting. In a world where many people are working remotely, having secure file access from anywhere is more important than ever. Companies can build stakeholder trust and free up time for more strategic tasks by taking proactive measures to address statutory reporting problems. Repeatedly evolving regulation and varying requirements in various jurisdictions merely multiply statutory reporting complexity. But most teams operate in silos with segregated templates and no singular audit trail. That’s why progressive firms are moving toward real-time reporting systems and keeping Excel as their compliance safety net.