The Australian Securities and Investments Commission (ASIC) requires the entities and industries adversely affected by the COVID-19 pandemic to focus on: asset values, provisions, solvency and going concern assessments, events occurring after year end and before completing the financial report, and disclosures in the financial report and operating and financial review (OFR) for financial reporting. More specifically, the ASIC announced that it would review the financial reports of about 200 larger listed entities and other public interest entities as at 30 June 2020 and require entities to apply more appropriate experience and expertise in the reporting and audit process, particularly in more difficult and complex areas, such as asset values and other estimates.

Required:

As explained above, companies are required to follow the regulations such as disclosure requirements for financial reporting during the COVID-19 period. Explain the reasons why we need to establish regulations in the financial reporting area from the pro-regulation perspective.