Name of individual on the first page of the financial statements

 

Question

 

Section 29(1)(e)(ii) requires that a company’s annual financial statements bear, on the first page of the statements, a prominent notice indicating the name, and professional designation, if any, of the individual who prepared, or supervised the preparation of, those statements.

 

Who is this “individual”?

 

Although not defined in the Act, “Compilation of financial statements” is interpreted in a broad sense and may include varying scopes. It relates to any engagement where a practitioner assists management with the preparation of financial statements in accordance with an applicable financial reporting framework. Furthermore, the compilation is distinct from an assurance engagement and does not entail the type of procedures that provides a practitioner with assurance [Refer to Glossary of terms to the IAASB Engagement Standards, ISRS 4410, par. 3-4 and Proposed revised ISRS 4410, par. 15(b) and 15(c)].

 

If this requirement is interpreted in accordance with the intention of Regulation 27(1), the answer would be as follows:

 

●       If the company’s financial statements are “independently compiled and reported”, the individual would be the independent accounting professional who prepared the financial statements.

 

●       If the company’s financial statements are “compiled internally”, the individual would be the company employee or officer who prepared or supervised the preparation of the financial statements.

 

However, the same IAASB pronouncements referred to above in relation to defining “compilation of financial statements” also indicate that although a professional accountant in public practice may be engaged to assist with the preparation and presentation of the financial statements, management retains responsibility for the financial information and the basis on which it is compiled. Wouldn’t this imply that the individual in Section 29(1)(e)(ii) would always be the company employee or officer who prepared or supervised the preparation of the financial statements?

 

My opinion

 

As indicated above, it depends of how this requirement is interpreted.

 

Response received

 

I agree with your views as outlined below:

 

-        If the company's financial statements are independently compiled and reported, the individual would be the independent accounting professional who prepared the financial statements.

 

         However, in this instance I agree with you that management retains responsibility and therefore I recommend that the name of the appropriate person in management as well as the name of the person that independently compiled and reported on the financial statements.

 

-        If the company's financial statements are compiled internally, the individual would be the company employee or officer who prepared or supervised the preparation of the financial statements.

 Source : SAICA