Interim reporting in Malta : an investigation

Abstract

Purpose: The main objective of this study is to assess and analyse the current situation in Malta with regard to Interim Financial Reporting. Amongst other objectives, it aims at establishing the perception of stock brokers and local financial controllers vis-à-vis various issues relating to interim financial reporting, in particular Maltese and European legislation and IAS 34. Design: A distinct questionnaire was electronically sent to stock brokers and financial controllers, whose rate of responses were measured at 40.38% and 22.93% respectively. Several statistical tests were carried out to examine the responses received from the two populations and the findings were subsequently presented and discussed. Findings: It was established that a number of entities, which are licensed either under the MFSA or the LGA, are legally required to prepare an interim report for an interim period. Nonetheless, it was also determined that a sizeable number of entities, although not legally imposed, compile interim reports for various management accounting purposes. On the other hand the general consensus was that the administrative burden imposed by such reports is the main problem associated with the preparation of such reports. The research also established that the accession of Malta into the EU brought only a single change to the local periodic reporting requirements. Finally, the study proved that all the participants accord an elevated level of importance to Interim Financial Reports. Conclusions: The research established that interim reports are useful for both the users and preparers. It was also determined that interim reports would be more useful if they contained financial ratios. Another conclusion is that despite the importance accorded to such reports, a number of participants seemed to lack the relevant knowledge to prepare appropriate reports. Value: This study is original since it takes into account both the stock brokers' and financial controllers' point of view and makes use of statistical methods to analyse the findings derived from the participants.