keeping up with changes in IFRSs
IFRSs are continuously changing yet the JSE is getting thorough with its reviews of Annual Financial Statements (AFS) of listed entities.
A number of companies have received a plethora of queries from the JSE with some being sent to Financial Reporting Investigation Panel (FRIP). So how do CFOs pro-actively manage this when they have other more demanding responsibilities?
Many CFOs have employed young CAs who are "in touch" with IFRSs but they are still receiving JSE letters.
Some work together with their auditors to prepare IFRS compliant AFS but the JSE still find errors in their AFS. It is worth noting that in terms of the New Companies Act section 90 (2) it is illegal for the auditors to prepare AFS of their audit clients.
My personal view is that every CFO should work with a JSE registered IFRS advisor. The CFO can proactively work with registered IFRS Advisors throughout the year and not just to review AFS at the end of the year. By working with a registered IFRS advisor, the CFO will have comfort about accounting for novel transactions or issues s/he finds technically challenging. The IFRS advisor will work with the CFO to ensure that AFS are in line with IFRS.
IFRS advisors may seem an unnecessary additional cost but companies often spend a lot of money trying to resolve JSE queries. Some even get legal opinions which are useless as the JSE expects a technical accounting response. Companies can save their reputation and money by using IFRS Advisors.
One such firm of reputable independent IFRS Advisors is W Consulting. W Consulting can go beyond just giving IFRS advice, they help with the actual preparation of financial statements be they complex consolidated AFS or simple AFS. For more information please visit : http://www.cpdsorted.co.za/pdfs/FinancialsSorted.pdf