Q. W.r.t your reply on disclouser of AS 10 in FS . what is the impact on materiality of FS?

Question

Dear Sir, thank you for your reply w.r.t disclosure of AS-10 in FS of Non-Corporate Entity

I understood from your reply that appropriate reporting should be done by auditor in the audit report in form 3CB that accounting standard has not been complied with.

Sir, the same was also mentioned in the ICAI guidelines. But the problem with the profession fraternity stands same as retrieving the accumulated depreciation from last 25 to 30 years. Also, the said problem will occur in coming years too.

Sir, my concern is that client is unable to provide original cost of asset. As the client have record only of past 8 to 10 years maximum. And because of which we have to report in every year that this accounting standard-10 has not been complied with. I would like to understand what will be the impact of these disclosures on the materiality of financial statements. Also, if one or more Accounting Standard not followed do the financials give a true and fair view?

As per your suggestion every year we have to report that AS -10 have not been followed up. In such circumstances how an auditor will report of true and fair of FS.

It is my suggestion that you being the member of CC must take an initiative before the board and try to get some solution for all of us.

I am sure that my voice will reach to the ears of ICAI (board / members) so that a fair solution may be provided to all of us.

With regards

CA Ankita Lodha

Answer 1

AS 10 was required to be complied since, year 1991. There is no change since then please. If management is not complying with the same, auditor will have no option but to report please.