KUALA LUMPUR (Jan 25): A joint study on the first-year implementation of the enhanced auditors' report (EAR) revealed that key users of audit and financial reports found value in the new reporting standards, said the Securities Commission Malaysia (SC).

It said two-thirds of the surveyed respondents acknowledged that the EAR is an improvement from the previous auditor's report.

The EAR was created as a joint study by SC's Audit Oversight Board (AOB), the Malaysian Institute of Accountants (MIA) and the Association of Chartered Certified Accountants (ACCA) to assess stakeholders' response to the new and revised enhanced auditor reporting standards.

"AOB, MIA and ACCA were in agreement that the EAR has spurred constructive behavioural changes within the financial reporting ecosystem and improved engagement between investors and companies in Malaysia," said SC.

"The results from this study are based on the review of EARs and annual reports of a sample of 190 companies listed on Bursa Malaysia with financial periods ended Dec 31, 2016, as well as views from over 170 audit committee members and investors," SC said.

Moving forward, SC said the EAR is expected to drive the flow of useful and relevant information to the capital market, reduce speculation on company performance and promote better understanding of financial statements.