Companies must navigate the increasingly complex disclosure requirements once they become publicly listed.. Accurate and credible public filings are significant in building trust and attracting investors. The authenticity of information with annual and ESG reports is crucial for ensuring investor confidence and maintaining transparency. In countries such as the UK and Australia, annual reports are mandatory for listed companies, while comprehensive ESG reporting is increasingly demanded to fulfill responsibilities towards investors and the public. However, ensuring the validity of these reports is often a challenge.
Challenges in Disclosure Verification
Effectively verifying information authenticity has become increasingly difficult, especially with ESG and annual reports packed with company data. Here’s an example of the disclosure requirements across three selected listing locations:
| Hong Kong | United Kingdom | Australia | |
| Financial Disclosures | Mandatory interim and annual report | Mandatory annual report | Mandatory annual report |
| ESG Reporting | Mandatory ESG disclosures in line with ISSB climate standards (announced in 2024). | Must disclose comprehensive ESG information under the Companies (Miscellaneous Reporting) Regulations. | The ASX’s Corporate Governance Principles require listed companies in Australia to disclose ESG-related information, emphasizing responsible business practices. |
| Penalties for false statements | Under the Securities and Futures Ordinance and the Listing Rules set by HKEX, failure to provide accurate, complete, and timely information or intentionally submitting false information may lead to regulatory consequences such as fines or other appropriate penalties. | Deliberately or recklessly submitting misleading, false, or deceptive information or statements is a criminal offense under the UK Financial Services and Markets Act 2000. Conviction of this offense may result in imprisonment and a fine. | Providing false information to the Australian Securities Exchange (ASX) is illegal under the Corporations Act. Section 1041E of the Corporations Act 2001 prohibits individuals from making false or misleading statements or disseminating misleading information related to financial products. Failure to comply with this provision is considered an offense. |
While issuers must fulfill complex disclosure requirements post-listing, resources spent on legal and regulatory compliance are a fraction of that spent during an IPO. Issuers, especially small-to-mid caps, face challenges in allocating sufficient resources to independently verify all information disclosed.
Document Verification Pain Points
Traditional methods of document verification are often time-consuming and labor-intensive, for example:
- Time Limit: Issuers face tight deadlines to publish an annual report once financial information is audited at year-end.
- Human Resource: Many issuers may not have dedicated teams to produce financial reports and often outsource to third-party agencies.
- Multi-departmental Participation: Data from annual and ESG reports are often collected from multiple departments across the company, leading to communication complexities and potential delays.
- File Management: Supporting documents are manually collected without a central data repository.
AI can significantly streamline data reporting and verification
Wizpresso Factify, our award-winning verification software, offers tools to address pain points throughout the disclosure verification process. Here are some examples:
- AI-assisted Verification: Factify automatically reads your disclosure draft in PDF or Word format and provides line-by-line suggestions on how each statement can be verified.
- Collaboration Capabilities: Factify enables work assignments to users across teams and departments and provides real-time progress tracking and reminders. This ensures everyone can see progress, avoiding delays in overall progress.
- Data Room: Build an AI-enabled knowledge base comprising investor-relevant supporting documents. Utilize large language models (LLMs) to answer investor inquiries.
Effectively verifying the authenticity of public documents is critical in building trust, attracting investors, and meeting regulatory requirements. Leveraging AI platforms can address resource constraints and ensure your company disclosures are accurate and compliant with regulatory requirements.
Learn more about Factify: https://wizpresso.com/RegulatoryReporting/Factify