Golden Share provides audit services in accordance with international standards:
- 1. IFRS compliant financial statements audit.
2. Conversion of financial statements for compliance with IFRS.
Conversion of financial statements involves adapting accounting information and updating statement entries in accordance with Ukrainian legislation so as to conform to International Financial Reporting Standards.
In most cases, the following reports require conversion in order to conform to IFRS:
- ○ Balance Sheet.
○ Statement of Changes in Owner’s or Stockholders’ Equity.
○ Profit and Loss Statement.
○ Cash Flow Statement.
Currently, in addition to accounting based on national standards, many companies operating in Ukraine have implemented IFRS compliant management accounting. These financial statements are compiled for the benefit of the company’s existing shareholders as well as to achieve a higher level of business transparency and impart greater confidence to market participants: private and institutional investors, banks and financial institutions.
Normally IFRS statements include many more entries of disclosure than are required by Ukrainian National Accounting Standards. In Ukraine, very few professionals are qualified to perform IFRS compliant reporting. Therefore, very few companies can submit proper IFRS statements, which is another reason to conduct audits on a regular basis.
Our approach to auditing IFRS financial statements is compliant with international Standards on Auditing (ISA) in the areas of audit planning and quality, procedures performed, and communications with clients’ management and shareholders.
Our clients can have well-founded confidence in the reliability of our audit opinions–we perform a full range of exhaustive audit procedures to ensure a comprehensive, well-rounded outcome: ISA compliant auditing of accounting software used by the client, examination of the client’s internal control procedures, audit evidence collecting and analysis, documentation of the auditor’s opinions and conclusions, and performing of additional tasks for compiling full and complete financial information and financial statements review. ‘Our experts are ACCA-certified and experienced in IFRS auditing of a wide variety of firms and businesses.’
IFRS audit procedure consists of examining the following audit evidence:
- – Evaluating the accounting principles used by the company.
– Verifying the accounting data submitted by the client’s employees.
– Examining the degree of disclosure in all facets of business activity as reflected in IFRS financial statements.
– Evaluating materiality guidelines used by the management as well as the financial statements’ general accuracy.
Examining a client company’s procedure of creating an international corporate or consolidated financial statement and verifying its compliance with IFRS standards are some of our major goals, since it is this procedure that is often the cause of methodological errors which can lead to misinterpretation of financial data in balance sheets, profit and loss statements, and other forms of IFRS accounting. An important factor that influences our procedural approach is whether our clients keep records under both IFRS and Ukrainian National Accounting Standards or if their international reports are compiled using their own financial position.
To ensure the accuracy of financial statements, we examine all aspects of the client’s business, including assets, liabilities, equity, revenues and expenses over the reporting period. We then produce IFRS statements based on our findings, such as Balance Sheet, Profit and Loss Statement or Income Statement, Cash Flow Statement, Statement of Changes in Equity.
Every industry uses its own internationally accepted reporting structure. The information provided in those statements may partially or completely overlap, since the disclosed figures are based on the accounting data.
To ensure the accuracy of each balance sheet entry, we examine whether the assets (both fixed and floating) and liabilities (capital and reserves, long-term and short-term) are accurately reflected in the financial documents.
Another important aspect of IFRS accounting audit is ensuring the accuracy of the information on company activities as presented in Profit and Loss Statement or Income Statement. It is, in essence, the main document which provides disclosure of the company’s financial performance over the specified reporting period. To understand whether the company’s financial performance is presented accurately, we use the concept of comprehensive income, which takes into account all income and expenses entries, including those related to financial activities of shareholders, and fiscal relations with the third (non-profit) sector.
The Cash Flow Statement data is the basis for understanding whether the Balance Sheet and Profit and Loss Statement are accurately compiled. This statement consists of three parts which reflect the cash flows related to operating, investment, and financial activities respectively.
The company’s activities cannot be comprehensively examined without the Statement of Changes in Equity. To ensure the accuracy of this statement, we review monetary transactions which relate to the business owners and shareholders, such as capital infusion, dividend payment, and equity redistribution.
In addition to examining the statements’ accuracy, IFRS audit relies on the auditor’s notes that allow the financial data users—a financial manager, a potential investor, or a bank credit committee—to quickly grasp the company’s financial situation and make correct decisions. Unfortunately, in some cases, the statements are filled by rote, and the notes do not contain a quality study of the company’s financial performance. We strive to ensure that our clients are provided with IFRS statements to ensure their correct interpretation by recipients.
In the audit opinion, we review our client’s financial statements in accordance with ISA and present evidence of misreporting or lack thereof. The audit opinion may be unqualified, qualified, or adverse depending on the presence or absence of such evidence. In addition, if the client so desires, we use the audit results to provide recommendations as to how their financial statements can be made IFRS compliant. Our audit services can also be helpful in identifying business risks, bottlenecks, and problem areas, as well as in finding remedial measures.
Our pricing policy for IFRS audit services is based on the following factors:
- – Industry the company operates in.
– Corporate ownership structure and legal group structure (major shareholders, equity participation in other domestic or foreign companies), branches and representative offices available, reporting procedures and consolidation within the group.
– Bookkeeping system, forms of accounting, accounting software and ERP systems used, the number of accounting personnel and their operational system.
– Target users and purpose of the statements.
– Equity, property, assets and liabilities, suppliers and buyers, debtors and creditors, gains and losses for a specified period, inventories, number of employees, and other significant business performance indicators.
In addition to IFRS audit services, we conduct workshops and training on IFRS reporting. We conduct our training sessions in Ukrainian or Russian and provide an explanation of audit terms usage in English. Depending on the size of the group, the client’s location, and individual preferences, we can hold our training sessions at our premises or at a venue of the client’s choice.
We also provide services on methodology development for the conversion and use of IFRS statements. In essence, the client company receives a list of rules and regulations that contain precise algorithms for use by their accounting and financial personnel for use in carrying out accounting procedures.
The Golden Share Consulting Group’s IT department develops special software add-ons for our client companies, for the automatic generation of IFRS statements.
Contact us at the Golden Share Audit Company where we can ensure that your IFRS financial statements will always be accurate, complete, and fully compliant!