Financial Reporting Quick Commentary (FRQC) 189

If your Goodself is an ICAP member and have seen the captioned matter email from ICAP, please ignore this email.

2.   Being an Important matter, we would inform you about ICAP Circular 01/2024 about Auditor's Report (Attachment 189.1).

3.   The International Accounting Standards Board (lAS B) made certain narrow-scope amendments to the International Accounting Standard (lAS) 1, Presentation of Financial Statements in February 2021 which have been effective for annual reporting periods beginning on or after 1.1.23.
 

4.   The above-referred amendments to lAS 1, inter-alia, require companies to disclose their 'material accounting policy information' instead of 'a summary of significant accounting policies'.
 

The extract from relevant paragraph of lAS 1 (after above amendment) is reproduced below:

"10. A complete set of financial statements comprises:

(a) a statement of financial position as at the end of the period;

(b) a statement of profit or loss and other comprehensive income for the period;

(c) a statement of changes in equity for the period;

(d) a statement of cash flows for the period;

(e) notes, comprising material accounting policy information and other explanatory

information;

(ea) .... ....... .. ...... ........ .... ... .... ........ ................ .. ... .......... .. .. .

(f) ........ ... ..... ... ... ...... ..... ........ ... .. .... ...... ... ..... ... ......... .... .... "

(bold & italic ours)
 

5.   The International Auditing and Assurance Standards Board's (IAASB) has considered the impact of 'above amendment' and accordingly replaced term 'a summary of significant accounting policies' with the term 'material accounting policy information' in the illustrative auditor's reports contained in Appendix to ISA 700 (revised) 'Forming an Opinion and Reporting on Financial Statements'.

6.   In view of above, members are advised to ensure that in audit engagements wherein financial statements for the accounting periods beginning on or after 2.1.23 have been prepared using International Financial Reporting Standards as applicable in Pakistan, the term 'material accounting policy information' instead of term 'a summary of significant accounting policies' is used and referred to in the auditors reports issued under ISA 700 (revised) 'Forming an Opinion and Reporting on Financial Statements' and Companies Act, 2017.
 

7.   Further Details & Services
 

Should you require any clarification or explanations in respect of the above or otherwise, please feel free to email Mr Amsal at amsal@786tax.com with CC to info.kasbati@professional-excellence.com