FEE study on audit report implications of IFRSs
12 Apr 2005
The European Federation of Accountants (FEE) has released a discussion paper on Reporting Issues in Relation to Endorsed IFRS and Possible Implications for the Audit Report.
The European Union IAS Regulation requires European listed companies to prepare consolidated financial statements from 2005 on the basis of those IFRS that have been endorsed by the European Commission. Because endorsed IFRSs may not necessarily be the same as full IFRSs because of time lags or 'carve-outs' such as was done with IAS 39, the appropriate wording to describe the accounting framework in the auditor's report and in the accounting policies note must be carefully considered. The FEE discussion paper examines the following questions:
- How should the financial reporting framework be referred to in the accounting policies in the notes to the financial statements?
- When the company also complies with full IFRSs, should it refer to that fact?
- How should the framework be described in the audit report? Can there be a difference in description compared to the reference to the financial reporting framework in the accounting policies?
- Would the reference to the European financial reporting framework have a clear meaning outside the EU?