THE INSTITUTE of Chartered Accountants of Jamaica (ICAJ) has adopted International Standards on Auditing (ISA) with effect from July 1, 2002 and International Accounting Standards (IAS) for periods commencing on or after July 1, 2002.
This move should eliminate the questions asked by international investors or representatives of international lending agencies, etc., as to how Jamaica's standards compare with International Standards. The transition to ISA is easy as most of ICAJ's Standards on Auditing are already the same as ISA's and the others can be easily adopted.
DIFFICULT TO IMPLEMENT
The move to IAS will be more difficult to implement as the existing standards are being revised and the changes may be effected in early 2003.
The expectation is that companies whose year ends on June 30, 2003 will be those which should report in compliance with IAS. Early adoption of IAS is also encouraged. The ICAJ Standard on Interim Financial Reporting, which is the same as the IAS, came into effect for reporting periods beginning on or after January 1, 2002.
This standard requires the interim financial statements to be prepared on the same basis as used for the audited financial statements.
It follows that companies with a June 30, 2002 year-end can report their September and December 2002 and March 2003 results on the June 30, 2002 basis and then report June 30, 2003 using IAS.
Such companies may consider adopting IAS for September 2002 interim financial report, restate June 30, 2002 financial statements and September 2001 using IAS and follow IAS reporting for all quarters up to June 30, 2003. A reconciliation between the previous reporting basis and IAS should be provided.
As previous year's/period's statistics have to be restated to conform with IAS, companies may do preparatory work by restating the prior two years to ensure that the comparative information is available to restate comparative information, including the cash flow statements.
Your professional advisor should be able to assist companies with their migration to IAS.
Mr. Raphael E. Gordon is the managing partner of KPMG Peat Marwick, Past President of the Institute of Chartered Accountants of Jamaica, a member of the Public Accountancy Board, and Jamaica's representative on the Association of Chartered Certified Accountants International Assembly. The views and opinions are those of the author and do not necessarily represent the views and opinions of KPMG Peat Marwick. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.
