Forensic Financial Accounting Analysis: Examples from the Palm Oil Industry Relating to Natural Capital in 2023

Responsible Alpha

Ensuring global food system stability requires companies use consistent and accurate approaches to their financial accounting of agriculture, so that reported values are reliable. Firms are subject to various accounting regulations under International Financial Reporting Standards (IFRS), or their local accounting standards. Naturally, markets, analysts, and portfolio managers rely on audited financial information to better understand the financial valuation and overall investment thesis in the palm oil sector. Crucial then to this understanding is accurate information. Yet, market participants may receive inaccurate, and potentially misleading information about the economic benefits and consequences of palm oil production.