Tech Mahindra won a bid to buy a controlling stake in the fraud-hit Satyam Computers. The deal has been done with amazing speed-even before the accounts could be restated.

Shouldn?t shareholders of the bidding companies worry about the basis of making such large investments when these are made without any supporting independently audited accounts, without the investigating agencies framing any charges against the admittedly fraud-infested company? Evidently, Tech Mahindra and others took large calculated risks to not let an opportunity that they perceive, pass. Entrepreneurship is about taking such calculated risks.

Still. there is a strong case for accountants and auditors adding speed to their work. Most large companies have invested heavily into information technology to streamline their operations. The accounting profession has also upgraded its skills for this IT-intensive environment. Now, investors, regulators and the rest of society need to see the benefits of this investment in terms of faster release of information. Unfortunately, the evidence points to a deterioration in spite of the investments into technology and human skills.

Listed companies in India are required to provide copious amounts of information at regular intervals. This is a healthy practice as a result of which, markets are guided by the release of regular official and reasonably reliable information. India is one of the few countries in the world that mandates the publication of quarterly financial results of listed companies. Indian listed companies are required to publish their quarterly results within a month of the completion of the quarter. This pressure on timeliness is among the best practices in the world.

But, India?s record of good disclosure practices is marred by a few strange exceptions. One of them is the permission given to companies to postpone the release of the quarterly results if they would be releasing their annual audited financial accounts within two months. Many companies use this exemption. As a result, the timeliness of the last quarter of a company?s financial year suffers significantly.

Usually, nearly 4,000 announce their quarterly results within a month of the end of the quarter. However, because of the exception allowed, only about half of the companies adhere to this timeliness in March. This sharp fall in timeliness of information is avoidable.

If companies can produce results within a month in the first three quarters they can do so in the last quarter as well. Exceptions given hitherto were possibly, to accommodate a transition. It is now time to plug the exception to the rule.

The last quarter of an accounting year is the most important one. In the case of many companies it provides the first clue to the possible dividends that could be distributed. Conventionally, companies complete their accounting year in March and historically, companies have had larger businesses during the Jan-Feb-Mar quarter compared to any other quarter. Many companies book some expenses only in the last quarter such as bonus payments or certain amortisations. (While this is not a good practice, it is prevalent.) In general, the last quarter contains the largest business, it contains many entries that are only accounted in the last quarter and it provides a clue on the possible dividends the company may distribute.

A worrisome factor is the gradual deterioration of disclosure timeliness. About 2,400 to 2,500 companies provided their March-quarter results within 31 days till 2005. Since then, this number has declined. Only 1,855 companies provided their March 2008 results within 31 days. In 2009, the deterioration is very sharp.

By 17 April 2009, only 28 companies had announced their quarterly financial results for the quarter ended March 2009. In the past, by the 17th of April, on an average, 94 companies provided their March-ended quarterly results. 28 is thus a sharp fall after the fall already witnessed in the previous year. Even if we account for the fact that the first 17 days had three public holidays, the record of 28 is worrisomely low.

Interestingly during this period the stock markets have been on a roll, almost celebrating the exceptional fall in information. While entrepreneurs can take risks and investors can sometimes demonstrate irrational exuberance, regulators need to ensure that the markets are driven mainly by timely and reliable information.

During times of uncertainty, such as these, reliable information is particularly important. It is unfortunate that reliability would take a hit because of the suspension of AS-11. Now, we should not let the timeliness also take a hit. This will seriously hurt the credibility of financial statements from Indian companies.

It is therefore imperative that Sebi mandates the timely release of quarterly financials by listed companies without exception and arrest the fall in availability of information.

The author heads the Centre for Monitoring Indian Economy