The review of financial statements prepared in accordance with previous NZ GAAP raised the following matters:

One issuer failed to consolidate a wholly owned subsidiary and to provide group financial statements as required by the Financial Reporting Act 1993 and FRS 37: Consolidating Investments in Subsidiaries (FRS-37).

The issuer was unaware that section 13 of the Financial Reporting Act was amended by section 10 of the Financial Reporting Amendment Act 2006. This amendment, which now requires all issuers to prepare group financial statements, came into force on 22 November 2006.

Section 13(2) of the Financial Reporting Act used to exempt all entities that are wholly owned by a reporting entity that is a body corporate that is incorporated in New Zealand or a nominee of such a body corporate from preparing group financial statements. Amendments made to the Financial Reporting Act by section 10 of the Financial Reporting Amendment Act 2006 means that this exemption no longer applies to entities that are issuers from 22 November 2006.

Amended section 13(2) states:

"Group financial statements are not required in relation to a reporting entity that is a company if, on the balance date of the company, the company is not an issuer and the only shareholders of the company comprise a reporting entity that is-

FRS-37 (paragraph 5.1) states that "a parent that has one or more subsidiaries at its reporting date must present consolidated financial statements in accordance with this Standard".

Disclosures in the annual reports of three issuers (including one NZ IFRS issuer)indicated that other services were provided by the auditors of the issuers. However, separate disclosures of the fees paid to the auditors for those other services were not provided.

The requirement to separately disclose fees paid to the auditor for other services provided is prescribed both in the Companies Act 1993 and FRS-9 and NZ IAS 1.

The Companies Act (section 211(1)(j)) requires the annual report of a company to state the amounts payable to the auditor of the company as audit fees and, as a separate item, fees payable by the company for other services provided.

FRS-9 (paragraph 6.13(e)(iii)) requires separate disclosure of other services provided to group entities by the auditor. Paragraph 6.14 of the same Standard states that "in most circumstances the items listed in paragraph 6.13 would, by their nature, be material". Fees paid to auditors for other services provided are just such an item and must be disclosed separately.

Under NZ IFRS more detailed disclosures are required. NZ IAS 1 (paragraph NZ 94.1(a)(ii-iv))) requires separate disclosure of fees to each auditor of the parent for audit fees, audit related fees, tax fees and all other fees, as well as a description of the nature of the services provided.

The financial statements of one issuer, contained in its annual report, were not signed and dated as required by the Companies Act, the Financial Reporting Act and FRS-5: Events after balance date.

While the financial statements submitted by the issuer to the Companies Office were signed by four directors of the company and dated, the financial statements included in the issuer's published annual report were not signed and dated by the directors.

Section 211 (1)(b) of the Companies Act requires the financial statements included in the annual report to be signed in accordance with section 10 of the Financial Reporting Act. Section 10 of the Financial Reporting Act requires that directors sign and date the financial statements.

FRS-5 (paragraph 6.1) states that "an entity must disclose the date when the financial report was authorised for issue and who gave that authorisation".

FRS-5 (paragraph 6.2) explains that it is important for the users to know when the financial statements were authorised for issue, as the financial report does not reflect events after this date.