Transitioning to IFRS Managing the Transition Janet S tockton - - PDF document

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Transitioning to IFRS Managing the Transition Janet S tockton - - PDF document

Feb 12, 2023 297 likes •399 views

Transitioning to IFRS Managing the Transition Janet S tockton March 31, 2010 Managing the Transition Milestones along the way Communicating to the public IFRS financial stat ements S elect ing and applying policies under IFRS -

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Transitioning to IFRS

Managing the Transition

Janet S tockton March 31, 2010

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Managing the Transition Milestones along the way

  • Communicating to the public
  • IFRS

financial stat ements

  • S

elect ing and applying policies under IFRS

  • IFRS

1 and the opening balance sheet

  • First interim IFRS

financial statements

  • First annual IFRS

financial stat ement s

  • Involving the auditor
  • Impact of a change in auditors
  • Working together on financing transactions
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Managing the Transition Communicating to the public Part icipant s in t he t ransit ion

  • Management
  • Audit commit tee/ Board of Directors
  • Auditor
  • Analysts

Ultimately – the shareholder Managing the Transition Communicating to the public Ensuring t he confidence of t he shareholder

  • Is management effect ively monitoring and controlling the

move to IFRS

  • Is management preparing analysts and shareholders for the

changes they will see under IFRS

  • How is t his being communicat ed?

Looking at MD&A in a new way

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Managing the Transition Communicating to the public MD&A

  • Account ing policy choices and implementat ion decisions
  • Information syst ems
  • Int ernal controls over financial reporting
  • Disclosure cont rols and processes
  • S

ufficiency of financial report ing expert ise

  • Business activities influenced by GAAP measures

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Managing the Transition Communicating to the public MD&A

  • Account ing policy choices and implementat ion decisions
  • Information syst ems
  • Int ernal controls over financial reporting
  • Disclosure cont rols and processes
  • S

ufficiency of financial report ing expert ise

  • Business activities influenced by GAAP measures

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Managing the Transition Communicating to the public New opport unit ies in financial report ing – will “ non- GAAP” measures be a thing of the past?

  • IAS

1 presentat ion standard is much more open, may even require new headings and subt ot als

  • New opportunit ies for bett er report ing?
  • How will t he Cdn regulat or react?
  • How will t he auditor react?

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Managing the Transition IFRS financial statements

  • Selecting and applying policies under IFRS
  • IFRS

1 and the opening balance sheet

  • First interim IFRS

financial stat ements

  • First annual IFRS

financial stat ements

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Managing the Transition Selecting policies under IFRS

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What does “ selecting” include

  • Det ermining an appropriate account ing policy
  • Deciding not t o change a current policy

General advice offered by your auditor*

  • Differences bet ween existing Cdn GAAP and IFRS

s

  • Alternative FIRS

account ing policies

  • Analysis of alt ernative IFRS

accounting policies

* This is not an assurance engagement

Managing the Transition Applying the policy Concerns when applying a specific IFRS accounting policy

  • Has t he policy been correctly int erpreted
  • Has the policy been appropriat ely applied

General advice offered by your auditor*

  • Views on interpretat ion and application

* This is not an assurance engagement

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Managing the Transition IFRS 1 and the opening balance sheet Preparing an “ int ernal opening IFRS st at ement of financial posit ion”

  • Involving the auditor – providing assurance
  • What level of assurance can t he audit or provide
  • To whom can the auditor provide that assurance
  • What assurance standard is the auditor working under
  • What fact ors will t he audit or consider before accept ing t he

engagement

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Managing the Transition IFRS 1 and the opening balance sheet Nat ure of t he audit report

  • S

pecial purpose report

  • Purpose, scope
  • Basis of accounting
  • Explanat ory paragraphs
  • Account ing policies may be different from t hose used for t he

ext ernal st at ement s

  • “ Fair presentat ion” can only occur with a complete set of financial

st at ement s

  • Restrictions as to use of t he report

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Managing the Transition First interim IFRS financial statements The 135 day crunch

Annual 2010 Cdn GAAP statements 90 days First IFRS interim financial statements 45 days*

  • Statement of financial position at:
  • March 31, 2011
  • December 31, 2010 (UNAUDITED)
  • January 1, 2010 (opening IFRS statement of financial position) (UNAUDITED)
  • Statements of comprehensive income, changes in equity and cash flows for:
  • Three months ended March 31, 2011 and 2010
  • Reconciliation notes

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Managing the Transition First interim IFRS financial statements Addit ional pressure on management and st affing t o deal wit h audit ors during t he “ crunch” period

S hould you have your audit or perform a review?

  • Timely considerat ion of significant account ing matt ers
  • Opportunity for early resolution

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Managing the Transition First interim IFRS financial statements Obj ective of the review

  • Provide a basis for report ing whether any mat erial

modificat ion needs to be made to be accordance with GAAP

  • Based on an expect ation developed from knowledge of

account ing and financial pract ices

  • Knowledge base set s the stage for inquiries, analytical

procedures and discussions

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Managing the Transition First interim IFRS financial statements What are your auditor’ s concerns when reviewing the first IFRS int erim financial stat ements?

  • Updating understanding of the entit y and it s control

environment

  • Changes in internal controls to ensure completeness and accuracy of

IFRS adj ust ment s

  • Change in internal cont rols to ensure completeness and accuracy of

informat ion not previously required under Cdn GAAP

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Managing the Transition First interim IFRS financial statements What is the impact on the nature and extent of procedures typically completed by the auditor?

  • Forming an expectat ion
  • Will be based on updat ed underst anding of ent it y and it s cont rol

environment

  • Analytical procedures impacted:
  • Comparat ive period previously prepared under different GAAP
  • Reconciliations prepared in the context of two different financial

report ing frameworks

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Managing the Transition First annual IFRS financial statements Considerations to the entity and the auditor

  • Doing work early
  • Audit the comparative period and the opening balance sheet

simultaneous with t he 2010 audit?

  • Impact on materiality considerations
  • Rot ation issues
  • Communicat ions – deficiencies in internal control?

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Managing the Transition Working with your auditor Change in audit or aft er 2010 audit is complet ed

  • Who takes responsibility for the 2010 comparatives in the

first annual IFRS financial stat ements?

Acquisition statements and consents

  • Converting AS

PE GAAP to IFRS

  • where will t he regulat ions fall?
  • Lead time required?
  • Impact on audit report ?

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