September 10, 2002	Tuesday	Rajab 2, 1423

KARACHI, Sept 9: A new International Standard on Auditing (ISA) has been developed to address the increasing number of complex accounting pronouncements containing measurement and disclosure provisions based on fair value.

This was announced in a communication of the International Federation of Accountants (IFAC) received here.

It said that the new ISA entitled “Auditing Fair Value Measurement and Disclosures” has been developed by the International Auditing and Assurance Board (IAASB) of the IFAC.

The ISA addresses audit considerations relating to the valuation, measurement, presentation and disclosure for material assets, liabilities and specific components of equity presented or disclosed at fair value in financial statements.

Specifically, it was pointed out, the ISA provides information on understanding the equity for determining fair value measurements and disclosures and relevant control procedures, assessing the appropriateness of fair value measurements and disclosures, using the work of an expert, testing the equity’s fair value measurements and disclosures, evaluating the results of audit procedures, management’s process for determining fair value and management representations and communication with those charged with governance.

“It is important that auditors obtain sufficient audit evidence that fair value measurements and disclosures are in accordance with the entity’s identical financial reporting framework as changes in fair value measurements that occur over time may be treated in different ways under different financial reporting frameworks,” emphasised Dietz Mertin, IAASB chairman.—APP