Pursuant to promulgation of the 2017 Act on May 30, 2017, disclosure requirements of fourth and fifth schedules became applicable to various classes of companies for preparation of financial statements, in addition to the applicable financial reporting frameworks
prescribed for each class under the third schedule, said a statement issued by SECP here on Thursday.
Therefore, while the Governmental Accounting Standards Board (the applicable financial reporting framework
) aggregates multiple funds into one opinion unit, the auditing standards would require that separate components be identified and audited separately.
This communication should include the objectives of the engagement: the responsibilities of management: the responsibilities of the accountant: the limitations of the compilation agreement; identification of the applicable financial reporting framework
; and the expected form of the accountant's compilation report and a statement that there may be circumstances in which the report may differ from its expected form and content.
* The requirements of the applicable financial reporting framework
relevant to accounting estimates, including related disclosures
Finally, in the superseded or amended standards, some requirements were implicit, and SAS 122 makes those requirements explicit: determining whether the applicable financial reporting framework
is acceptable; having management agree to their responsibilities at the onset of engagement; and applying quality control procedures at the audit engagement level.
the method of accounting for the effect of the change is in accordance with the applicable financial reporting framework
120, the phrase "applicable financial reporting framework
" is introduced.
* The introduction of the term "review evidence" to the review literature by clarifying that a review requires the accumulation of review evidence that will provide a reasonable basis for obtaining limited assurance that there are no material modifications that should be made to the financial statements for the statements to be in accordance with the applicable financial reporting framework
. The standard states analytical procedures and inquiries will ordinarily provide the appropriate evidence but that the accountant should use professional judgment in determining the specific procedures.
CPAs will be required to describe the financial reporting framework used if the financial statements are prepared in accordance with a special-purpose framework (e.g., cash or tax basis) and will have to disclose any material misstatements, such as those caused by a known departure from the applicable financial reporting framework
or inadequate disclosures.
* Whether the applicable financial reporting framework
is explicitly or implicitly restricted to the preparation of a complete set of financial statements.
This is an engagement in which an accountant issues a report designed to enhance the degree of confidence of third parties and management about the outcome of an evaluation or measurement of financial statements (subject matter) against an applicable financial reporting framework