Market Conditions

The quality of financial reporting in Qubec has improved over the past few years, but there is room for enhancement when it comes to filing Management’s Discussion and Analysis (MD&A) reports and financial statements, according to the province’s regulator of financial institutions, the Autorit des marches financiers (AMF).

“This year, once again, we issued close to 1,000 recommendations to the 195 issuers selected,” AMF reported. “Improving the quality of the continuous disclosure records of reporting issuers is indeed the mission of the CDR (Continuous Disclosure Review) Program.”

About 33% of deficiencies noted for the reporting period in question related to MD&As, according to the AMF. Some of the common mistakes included:

* Failure to discuss effects of significant acquisitions or discontinued operations.

* Failure to quantify factors causing changes in revenues.

* Repeating figures presented in financial statements.

* Failure to discuss the issuer’s liquidity position and needs for both short and long term.

* The presentation of non-GAAP financial measures without complying with CSA Staff Notice 52-306, Non-GAAP Financial Measures (“Notice 52-306”).

* The MD&A does not state the chief executive officer’s and the chief financial officer’s conclusions about the effectiveness of the disclosure controls and procedures.