Page 36 - Newsletter-May-2016

Newsletter The Institute of Chartered Accountants of Pakistan technical update Revised ISA 810 ‘Engagement Use-around-the-world/Documents/2016-pocket-guide.pdf. The analysis outlined in the Pocket Guide is conducted to Report on Summary Financial across 143 jurisdictions which shows that IFRS Standards Statements’ are required for all or most domestic publicly accountable entities (listed companies and financial institutions) in The International Auditing and Assurance Standards 119 jurisdictions—83 per cent of those surveyed. Most of Board (IAASB) has made amendments to International the remaining jurisdictions permit their use. In addition, Standard on Auditing (ISA) 810, ‘Engagements to Report on 80 jurisdictions now require or permit use of the IFRS Summary Financial Statements’. The limited amendments for Small and Medium Sized Entities (SMEs) Standard. to ISA 810 (Revised) leverage the additional transparency in the auditor’s report on the audited financial statements Accounting Standard for Not for resulting from the IAASB’s new and revised Auditor Reporting standards issued in January 2015, in particular Profit Organisations (NPOs) ISA 700 (Revised), ‘Forming an Opinion and Reporting on The Securities and Exchange Commission of Pakistan Financial Statements’, and new ISA 701, ‘Communicating (SECP) through SRO No. 413/2016 dated May 11, 2016 has Key Audit Matters in the Independent Auditor’s Report’. further directed non-listed companies formed/licensed Amendments to ISA 810 include: under Section 42 and 43 of the Companies Ordinance, (i) relocating and clarifying the material addressing 1984 to follow ‘Accounting Standard for Not for Profit the auditor’s work on information attached to the Organisations (NPOs)’ issued by the Institute and made summary financial statements, including making it effective for annual financial period beginning on or specific reference to considering the implications for after July 1, 2016. the auditor’s report; (ii) making it mandatory that the ISA 810 auditor’s report The Standard is available to download at http://www.icap. includes a statement if the auditor’s report on the net.pk/wp-content/uploads/2013/12/Final-Accounting- audited financial statements describes an uncorrected Standard-for-NPOs-for-SECP.pdf material misstatement of the other information according to ISA 720, The Auditor’s responsibilities Earlier through SRO No. 929/2015 dated September 10, relating to Other Information in documents containing 2015 the SECP has notified classification of non-listed audited Financial Statements; companies for the purpose of preparation of their financial (iii) amend extant ISA 810 requirements to address the statements. Accordingly the Accounting Standard for information gap related to material uncertainty related NPOs is to be applied by companies licensed/formed to going concern; under Section 42 and Section 43 classified as under: (iv) introducing a new requirement to include a reference 1. Public Interest Company and Large Sized Company to any communication of Key Audit Matters in the auditor’s report on audited financial statements; and having annual gross revenue (grants/income/subsidies/ (v) certain consequential amendments resulting from the donations) including other income/revenue of Rs.200 new and revised auditor reporting standards. million and above, along with International Financial Reporting Standards (IFRSs) as applicable in ISA 810 (Revised) will become effective at the same time Pakistan; and as the auditor reporting standards addressing general 2. Small and Medium Sized Company having annual purpose financial statements – for engagements to gross revenue (grants /income/subsidies/donations) report on summary financial statements for periods including other income/revenue less than Rs.200 ending on or after December 15, 2016. million, along with International Financial Reporting Standards on Small and Medium Sized Entities (IFRS for Pocket Guide to IFRS Standards 2016 SMEs) as notified by the SECP. The company may opt for: i. The revaluation model included in the IFRS 16 International Financial Reporting Standards (IFRS) 'Property Plant and Equipment': and Foundation has published the 2016 Pocket Guide to IFRS ii. The capitalising of borrowing costs as permitted Standards, available to download at http://www.ifrs.org/ by the IAS 23 'Borrowing Cost'. 36 May 2016