Proposed Changes to Audit Reports
The International Federation of Accountants (IFAC) is proposing changes to its standard on audit reports to require the auditor to clearly state the financial reporting framework being used to prepare financial statements. IFAC«s International Auditing Practices Committee (IAPC) has recommended these revisions to International Standard on Auditing (ISA) 700, The Auditor»s Report on Financial Statements, so that users may better understand the context under which the auditor's opinion is
expressed.
«Globalization of markets has meant that financial statements are increasingly used by foreign investors and analysts, hence clear labeling of the particular accounting and auditing frameworks is essential,» emphasizes Dietz Mertin, IAPC
chairman.
The IAPC has long required that the auditor«s report should identify which country»s accounting principles have been used in audited financial statements where that is not evident. The IAPC is amending the requirement now in an effort to transform what is currently best practice into standard
practice.
The changes to the standard will become effective for audits of financial statements for periods ending on or after September 30, 2002.
The exposure draft may be viewed on IFAC«s website (http://www.ifac.org). Comments must be submitted by May 31, 2001. They may be sent by fax
+1 (212) 286 9570 to IFAC«s Technical Director or e-mailed to Edcomments@IFAC.org. While comments are sought on all matters, IAPC is particularly interested in obtaining comments on whether the proposed date for the standard going into effect causes any implementation problems and whether any of the terms used in the amended paragraphs would be difficult to translate into another language or result in
ambiguity.
IFAC is the worldwide organization for the accountancy profession. Its mission is to develop and enhance the profession to enable it to provide services of consistently high quality in the public interest. Its current membership consists of 153 professional accountancy bodies in 113 countries, representing more than two million accountants in public practice, education, government service, industry and
commerce.
IFAC Publishes Award-Winning Management Accounting Articles
The International Federation of Accountants has published a collection of award-winning articles on financial and management accounting topics entitled Articles of Merit-2000 Competition. The articles, previously published in accountancy journals around the world, were selected as part of IFAC«s Financial and Management Accounting (FMAC»s) Article Award Program for Distinguished Contribution to Management
Accounting.
An international panel of judges selected «Accounting – The Digital Way» by Scott M. Boggs, as the winning article. The article focuses on how Microsoft Corp. developed an intranet-based digital environment linking all of the financial groups into a single coherent system. The system enables Microsoft employees to obtain real-time access to information and financial reports through the Internet, while reducing paperwork, transaction time and publishing and distribution costs. The article first appeared in the May 1999 issue of the Journal of Accountancy, published by the American Institute of Certified Public Accountants. It may be viewed on IFAC's Web site at
http://www.ifac.org/library.
Other meritorious articles in the collection focus on intellectual capital statements and knowledge management, managing the cash gap, determining the fair market value of web sites, implementing innovative management accounting systems, and payroll
benchmarking.
Articles of Merit-2000 Competition and other annual editions are currently available in electronic formats from the IFAC web site at
http://www.ifac.org/store. Print versions of the 2000 book will be available in several weeks. The print version can be ordered through IFAC's online bookstore or by calling IFAC offices at
+1 (212) 286 9344.