Guidance for auditing first-time adoption of IFRSs

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10 May 2005

The United Kingdom Auditing Practices Board (APB) has published Draft Bulletin 2005/3 setting out further interim guidance for auditors on first-time application of IFRSs in the United Kingdom and the Republic of Ireland.

In August 2004 the had APB published preliminary guidance on issues that may arise when companies make the transition from UK/Irish GAAP to IFRSs. The new Bulletin reflects a number of additional issues, including the auditor's review of interim financial information in the first year of adoption of IFRSs. The Bulletin notes:

In spite of the progress made in resolving many of the legal and regulatory issues there are some remaining uncertainties. In particular, the specific wording to be used in the auditor's report when describing the financial reporting framework is still under debate. The wording used in the draft Bulletin is "those IFRSs adopted for use in the European Union" but there is a continuing discussion within Europe on the best term to use. The APB favours a consistent approach to this matter within Europe and accordingly this Bulletin is being issued as interim guidance and the description of the financial reporting framework used in it may be changed if there is a European consensus for a different description.

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