Duty to prepare annual financial statements in terms of IFRS and to lay them before annual general meeting

Recent years have seen major changes in financial reporting worldwide. International financial reporting standards (IFRS® standards) or a local variant thereof are increasingly becoming mandatory throughout the world. The International Accounting Standards Board has been strengthening relationships with securities regulators, standard-setters and others around the world in order to encourage consistent application of existing IFRS standards.

The Board’s website lists 166 ‘jurisdictional profiles’ which set out each country’s use of IFRS standards. The website sets out a few observations on these pro-files, including:
· 144 jurisdictions require IFRS standards for all or most domestic publicly accountable entities (that is, listed companies and financial institutions) in their capital markets; and
· 86 of the 166 juris-dictions require or permit the IFRS for SMEs standard (that is, the simplified alternative to full IFRS standards). In Namibia, to use of IFRS for SME’s is permissible.
Financial statements prepared in terms of either IFRS or IFRS for SME’s provide information for a reporting period (a specified period). Comparative information for at least one prior reporting period is provided, to assist in identifying and assessing changes and trends.
In terms of Section 294 of the Companies Act 28 of 2004 of Namibia, the directors of a company must, in respect of every financial year ensure that annual financial statements are prepared in the official language (in the instance of Namibia thus in English) and must present them before the annual general meeting. Sufficient notice, in terms of the Act, must be given for the annual general meeting which must then be held not more than nine months after the end of every ensuing financial year of that company and within not more than 15 months after the date of the last preceding annual meeting of that company.
The annual financial statements must consist of:
(a) a balance sheet including notes;
(b) an income statement, including any similar financial statement where that form is appropriate and notes;
(c) a cash flow statement;
(d) a directors’ report complying with the requirements of the Act; and
(e) an auditor’s report as required by the Act.
Currently there are number of digital tools available for the drafting of annual financial statements, of which a number is used in the Namibian market. There responsibility for the drafting, can be sourced out to an independent party, by the board of directors, or it can be performed in house. PwC Namibia, has a department, com-mitted to providing this service offering it to both clients where we act as independent auditors and non-assurance clients.