ESMA issues its 2022 Corporate Reporting Enforcement and Regulatory Activities Report
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published its 2022 Corporate Reporting Enforcement and Regulatory Activities Report, providing an overview of activities carried out by ESMA and enforcers on financial and non-financial information and European Single Electronic Format (ESEF) reporting.
ESMA assesses how issuers comply with International Financial Reporting Standards (IFRS), ESMA’s Guidelines on Alternative Performance Measures (APMs), non-financial reporting obligations and ESEF reporting requirements and adhere to ESMA’s recommendations.
Key figures:
- 16% examination rate of financial statements drawn up under IFRS (640 issuers out of 4,090 issuers), with a 38% action rate to address material departures from IFRS (225 issuers), of which 25% related to disclosures and 13% to measurement and/or recognition;
- 13% examination rate of management reports for compliance with ESMA’s Guidelines on APMs (521 issuers), with a 17% action rate (89 issuers);
- 18% examination rate of non-financial statements (403 issuers), with a 25% action rate (100 issuers);
- 56% ESEF Transparency Directive high level requirements examination rate (2,423 issuers), with a 10% action rate (252 issuers), and a 25% ESEF RTS granular requirements examination rate (1,077 issuers), with a 4% action rate (39 issuers);
- All action rates noted in the report relate to a sample of issuers which were selected using an approach that, amongst others, considers the risk of misstatement. Therefore, the action rates are not representative of the total population of issuers.
The majority of the enforcement actions for financial and non-financial information concerned corrections in the future statements, while for ESEF reporting, most actions concerned the resubmission or re-dissemination of the ESEF annual financial reports.
Next steps
ESMA expects issuers, audit committees and auditors to consider the conclusions and recommendations of the report when preparing and auditing financial reports. In 2023, ESMA and the European enforcers will focus on ensuring that adequate transparency is provided regarding the enforcement priorities outlined in its 2022 European Common Enforcement Priorities Statement.
In light of the recent market events linked to the banking sector, ESMA highlights in particular the importance of disclosures by financial institutions that enable users of the financial statements to evaluate issuers’ exposure to interest rate and liquidity risks.
Further information:
Dan Nacu-Manole
Communications Officer
@ Email: press@esma.europa.eu