New Zealand companies are not disclosing their year 2000 problems despite a variety of accounting and financial standards that requires them to do so, says Ross Wilson of industry group Year2000.
“From our recent investigation of a small sample of recently released public company annual reports, we were unable to find even one which mentioned in any way that significant expenditure was likely to be incurred to solve year 2000 problems,” he says.
He’s critical of the absence of such information and, by inference, that the major auditing firms in New Zealand are lagging behind the auditing fraternity overseas.
“It may be that the amounts involved were not considered to be material by the companies concerned — assuming they even knew the problems existed.
“Frankly, we are of the opinion that either no consideration has been given — which we consider most likely — or that the management concerned has elected not to disclose the magnitude of these upcoming problems.”
Stewart estimates the cost of compliance to New Zealand companies with 10 or more staff at more than $1.3 billion in total.
He says that last year the Wall Street Journal reported that companies with significant year 2000 problems were reluctant to talk about the magnitude of the corrective work for fear of providing damaging information to future litigants in the event the problems were not fixed in time.
“In New Zealand, companies are theoretically not able to hide their year 2000 problems because disclosure is required under a variety of accounting and financial standards.”