Discussion Documents: REVIEW OF FINANCIAL REPORTING BY ISSUERS


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REVIEW OF FINANCIAL REPORTING BY ISSUERS - CYCLE 1

INTERNATIONAL FINANCIAL REPORTING STANDARDS

87.: There are risks associated with the period prior to and during the implementation of NZ IFRS because issuers and auditors face a significant learning curve, and issuers have to manage system and process changes. Issuers will have to take account of current NZ GAAP as well as the differences that will impact their financial report under NZ IFRS GAAP.
88.: Issuers have three years within which they will be able to choose to make the switch to NZ IFRS. During this period, current NZ GAAP will co-exist with NZ IFRS.
89.: Disclosures about the impact of adopting NZ IFRS must be made by issuers prior to adopting NZ IFRS as required by FRS-41 Disclosing the Impact of Adopting New Zealand Equivalents to International Financial Reporting Standards.

ONGOING REVIEW AND ENFORCEMENT

90.: The Commission will continue to review issuers' financial reporting as part of the Financial Reporting Surveillance Programme but will broaden its scope.
91.: The next review cycles will include a review of disclosures and adjustments made by issuers as they move to New Zealand Equivalents of International Financial Reporting Standards. These will include impact disclosures made prior to transition, then adjustments made to the balance sheets at the point of transition, and any other significant changes in accounting policies during this transition.
92.: The Commission will raise any identified breaches of the law with individual issuers, and take enforcement action as appropriate. This could include referral of matters to agencies such as the Ministry of Economic Development, the Accounting Standards Review Board, and the Institute of Chartered Accountants of New Zealand.

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