ALL MEMBERS OF THE INSTITUTE

Dear Member

REVIEW OF STATEMENTS OF STANDARD AUDITING PRACTICE (SAPs) AND STATEMENT OF STANDARD ACCOUNTING PRACTICE (SSAP)

The Technical Advisory Committees and the Professional Standards & Technical Advisory Committee of the Institute recently carried out a thorough review of Statements of Standard Auditing Practice (SAPs) and Statement of Standard Accounting Practice (SSAP) with a view to bring simplicity in the pronouncements of the Institute.

It was noted that SAPs 2 and 4 already stand withdrawn, while only SSAP-1 is in effect till the date of review.

The Committees also came to the conclusion that the remaining three SAPs should be withdrawn immediately and simultaneously the guidance provided in the said statements be reviewed and issued as ATRs.

As the matter of accounting for stores and spares is adequately dealt with by IAS 2 (Inventories) and IAS 16 (Property, Plant and Equipment) and compliance with these IAS is, in any case, mandatory in the preparation of financial statements, therefore SSAP 1 no longer served the purpose for which it was originally issued and hence should be withdrawn

These recommendations were considered by the Council in its 162nd meeting held on January 23 & 24, 2004 which, while approving the withdrawal of SSAP 1, has decided that the proposed ATRs should be exposed to the general membership for their comments. Accordingly, following draft Auditing Technical Releases are enclosed.

The members are requested to send their comments, if any, to the Director Technical Services by April 7, 2004. Comments would be more helpful if they indicate the specific paragraph or group of paragraphs to which they relate, clearly explaining the issue(s), and providing a suggestion for alternative text giving rationale for the suggested change.

Thanking you

Yours truly

Syed Sajid Ali
Director Technical Services

Encl. As above

P.S. SAP 1, SAP 3 and SAP 5 have been put on ICAP website showing all additions - underlined and all deletions as struck off.