Audit

APB issues new SIR on Reporting on GAAP Reconciliations

The Auditing Practices Board (APB) has issued:

- SIR 5000 ‘Investment Reporting Standards applicable to Public Reporting Engagements on financial information reconciliations under the Listing Rules’

- A paper providing feedback on the actions taken by APB in response to comments received on the exposure draft issued in June 2007.

SIR 5000 establishes specific Investment Reporting Standards and guidance for reporting accountants engaged to report publicly on reconciliations of the financial information of targets to the accounting policies of an issuer to be included in a Class 1 circular under the Listing Rules. Such reconciliations are often referred to as ‘GAAP reconciliations’.

Under the Listing Rules a reporting accountant is required to express an opinion as to whether:

• the financial information reconciliation has been properly compiled on the basis stated; and
• the adjustments are appropriate for the purpose of presenting the adjusted financial information on a basis consistent with the issuer’s accounting policies.

Richard Fleck, Chairman of APB commented:

“Reporting accountants have an important role in providing assurance on GAAP reconciliations provided in Class 1 circulars. SIR 5000, which is the last of the series of standards dealing with public reports that the Listing Rules require reporting accountants to make, has the objective of ensuring that this work is performed to a high standard and on a consistent basis”.

The SIR can be downloaded, free of charge, from the Publications/Standards for Investment Reporting (SIRs) section of the APB’s website.

APB PN 84