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My Say: Enforcement of accounting fraud under the Capital Markets and Services Act 2007

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There is growing recognition globally that healthy capital markets require an effective regime for financial reporting. Disclosures in a listed company’s financial statements provide critical information on its affairs and for this reason, the law has clear provisions addressing the disclosure of false or misleading information to the regulators and the public.

A provision that is used by the Securities Commission Malaysia (SC) to enforce breaches related to financial mis-statements of public-listed companies (PLCs) is section 369 of the Capital Markets and Services Act 2007 (CMSA). This section prohibits the furnishing of any information that is false or misleading to the SC and the stock exchange, among others.

As there are various types of information that are required to be furnished to the regulators, this provision can be broad in terms of its ambit. The statements may cover both year-end audited accounts as well as quarterly financial reports,…

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