the current requirement, iCPAR will need to constantly monitor and ensure no standards gaps develop between actual practices and internal standards and code. In the medium to long term period, review the current three year auditor rotation period. The rotation requirement should be restricted to PIE audits and the rotation cycle revised to a period that balances the need to manage audit costs and the need for audit continuity on the one hand with the need to manage possible threats to audit quality arising out of over familiarity with the client Enforce the statutory financial reporting framework for PIEs, SMEs and micro-sized entities after these entities have been defined. This should include the proactive monitoring and review of the quality of financial statements of SOEs and PIEs that are not regulated. The financial reporting framework required to be adopted by each SOE should be aligned to the nature of its operations, e.g. GBEs would use IFRS, while regulators and non-profit making government entities would use IPSAS. A specimen framework is shown below. If adopted, this would result in a differential financial reporting regime that requires entities to report according to a framework commensurate with the public interest responsibilities, and other circumstances. entity’s size, Table 7. Recommended Reporting Framework for Private and Public Sectors Entities Differentiated by Size and Level of Public Interest Private Sector Public Sector Entity Accounting/Auditing Entity Accounting/Auditing Framework Framework (GBEs) PIEs, Report in compliance with Report in compliance including IFRS with IFRS large private Mandatory audit in Mandatory audit in companies compliance with ISAs compliance with ISAs that meet the making definition of a entities Report in Compliance PIE with IPSAS Small and Report using IFRS for State-owned IPSAS medium-sized SMEs enterprises that Mandatory audit in entities qualify to use Mandatory audit in compliance with ISAs or IPSAS, and Central compliance with ISAs Supreme Audit Institution and Local (use IFAC (SAI) standards. Guide to Use of Government ISA in the Audit of SMEs) Report using Guide for “A Micro-sized Entities Applying IFRS for SMEs (2009)”.
the current requirement, iCPAR will need to constantly monitor and ensure no standards gaps develop between actual practices and internal standards and code. In the medium to long term period, review the current three year auditor rotation period. The rotation requirement should be restricted to PIE audits and the rotation cycle revised to a period that balances the need to manage audit costs and the need for audit continuity on the one hand with the need to manage possible threats to audit quality arising out of over familiarity with the client Enforce the statutory financial reporting framework for PIEs, SMEs and micro-sized entities after these entities have been defined. This should include the proactive monitoring and review of the quality of financial statements of SOEs and PIEs that are not regulated. The financial reporting framework required to be adopted by each SOE should be aligned to the nature of its operations, e.g. GBEs would use IFRS, while regulators and non-profit making government entities would use IPSAS. A specimen framework is shown below. If adopted, this would result in a differential financial reporting regime that requires entities to report according to a framework commensurate with the entity’s size, public interest responsibilities, and other circumstances. Table 7. Recommended Reporting Framework for Private and Public Sectors Entities Differentiated by Size and Level of Public Interest Private Sector Public Sector Entity Accounting/Auditing Framework Entity Accounting/Auditing Framework PIEs, including large private companies that meet the definition of a PIE Report in compliance with IFRS Mandatory audit in compliance with ISAs (GBEs) making entities Report in compliance with IFRS Mandatory audit in compliance with ISAs Report in Compliance with IPSAS Small and medium-sized entities Report using IFRS for SMEs Mandatory audit in compliance with ISAs (use IFAC Guide to Use of ISA in the Audit of SMEs) State-owned enterprises that qualify to use IPSAS, and Central and Local Government IPSAS Mandatory audit in compliance with ISAs or Supreme Audit Institution (SAI) standards. Report using “A Guide for Micro-sized Entities Applying IFRS for SMEs (2009)”.
ACS17317-ROSC-P154529-PUBLIC-Rwanda-ROSC-A-A-2015.docx