Response to consultation Paper on the draft guidelines on materiality, proprietary and confidentiality and on disclosure frequency
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Para 10 should require more detailed requirements regarding the summary description. Perhaps the summary could address the points mentioned in para 8.
These terms should be defined.
In addition, para 14 b. appears to allow banks to disclose less if that is appropriate in given political environment, this is unclear, please clarify.
Perhaps this Title could align itself with the International Standard on Auditing (ISA) 320, “Audit Materiality”, which offers more consistency.
Regarding the proper measures of size, they cover a limited number of banks, which gives the wrong signal. The cut-offs in para 18 a-d. should be lower, so much lower that they cover at least a significant majority of banks (75%).
Q2) Do you agree with the features of this process? If not, which ones would you exclude/include?
The requirements in para. 8 appear unnecessary verbose, please streamline.Para 10 should require more detailed requirements regarding the summary description. Perhaps the summary could address the points mentioned in para 8.
Q3) Should the guidelines be developed more on what is expected from institutions when an item of information is assessed as material?
Please see next answer.Q4) Do you agree with the principles and indicators to be considered in the assessment of materiality? Which additional principles or indicators, if any, would you like to see considered?
This Title is confusing, e.g. para 12 e. assumes that materiality is a 'user-centric concept,' but 12. g mentions that materiality should be an 'institution-specific concept.'These terms should be defined.
In addition, para 14 b. appears to allow banks to disclose less if that is appropriate in given political environment, this is unclear, please clarify.
Perhaps this Title could align itself with the International Standard on Auditing (ISA) 320, “Audit Materiality”, which offers more consistency.
Q5) Do you agree with the elements to be considered in the assessment of confidentiality or proprietary? Which additional element, if any, would you like to see considered?
-Q6) Do you agree with the indicators in paragraphs 18 that should lead institutions to assess their need to disclose information more frequently? If not, which alternative indicators would you suggest?
The suggested indicators are set at very high levels, thus allowing many banks to disclose only at low frequencies. Instead of concentrating on size, one should consider the frequency that banks apply to publishing semi-annual financial reports or interim reports (audited or non-audited) as a minimum frequency. This will likely align with investors' expectations and user demands.Regarding the proper measures of size, they cover a limited number of banks, which gives the wrong signal. The cut-offs in para 18 a-d. should be lower, so much lower that they cover at least a significant majority of banks (75%).