Asian countries require financial statements prepared in accordance with domestically-accepted accounting and auditing standards. Many Asian domiciles are shifting toward international accounting standards such as the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP).
The London-based International Accounting Standards Board (IASB) compiles the IFRS, while the Financial Accounting Standards Board (FASB) sets the GAAP in the US.
The ASEAN Federation of Accountants (AFA) serves as an umbrella organization for the national associations of accounting professionals of the member countries of ASEAN.
For Islamic markets, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) sets accounting, auditing, governance, ethical, and shari'a-compliant standards for its members. AAOIFI is a self-regulatory organization with members comprising market participants and regulatory and supervisory bodies from 24 countries.
A summary of local accounting standards is detailed in the table below. For more specific information on local accounting and audit standards, please refer to the individual market home pages.
Specific market rules and regulations regarding bankruptcy are included in the market home pages.
The Asia-Pacific Restructuring and Insolvency Guide 2006, which is linked below, provides a guide to explain the restructuring and insolvency frameworks of Asia-Pacific countries.
The Asian Institute of International Financial Law report entitled Property Rights, Collateral and Creditor Rights is linked below. The report reviews the legal framework for creditor rights in some jurisdictions in the region. The rating of each market’s legal framework is included in the table below.
The World Bank has developed Doing Business indicators to measure the effectiveness and enforcement of business regulations. Among these indicators, the Recovery Rate Index measures the efficiency of foreclosure and bankruptcy procedures. Indicators measuring the time and cost of insolvency proceedings involving domestic entities are also provided.
Insolvency Asia provides studies on the local insolvency regime of specific markets at the link below.
Effective Insolvency Systems table
Corporate governance reform has been a mantra throughout the region since the 1997 Asian financial crisis. The Asian Corporate Governance Association (ACGA) is an independent, non-profit membership organization that tracks corporate governance developments in Asia. Country-specific changes in corporate governance are available at the ACGA website, which is linked below.
The Asian Development Bank (ADB) also published a study, Corporate Governance and Finance in East Asia, which profiles recent reforms and offers recommendations for further action.
A White Paper on Corporate Governance in Asia, prepared by the Organisation for Economic Co-operation and Development (OECD)-organized Asian Corporate Governance Roundtable, is outlined in the table below. The full document is available at the OECD website, which is linked below.
Corporate Governance Extract table
Statutory laws governing contracts in individual markets are included in the market home pages. For securities, some bonds may have additional contractual provisions specific to a bond issue. The provisions typically contained in the bond documents (e.g., prospectus and subscription agreement) provide protection to investors and enhance the marketability of an issue.
The World Bank developed its Doing Business indicators to measure the effectiveness and enforcement of business regulations.
In terms of contract enforcement, World Bank provides a list of indicators that measure the efficiency of the judicial (or administrative) system in the collection of overdue debt. The full set of indicators and an explanation of terms and methodology used can be viewed at the World Bank website.
Unethical or illegal practices by market participants not only violate investor rights but can also impact an entire market’s reputation. Market regulators set professional codes of ethics that support both investor protection and market integrity. Although all markets gravitate toward applying international best practices governing market operations, each market structures has its own rules and regulatory infrastructure for compliance and enforcement. For specific market standards and accepted practices, please refer to the individual market home pages.
OECD Principles of Corporate Governance, which are linked below, serve as a guideline among market regulators when drawing up and enforcing market rules, regulations, procedures, and codes.