ICAP issued Circular 12 (September 12, 2024) on ‘Auditor’s Report on financial statements required to be submitted together with tax return’.
It has been noted that various non-standard audit report formats are being issued by the auditors of private companies (particularly having paid up capital less than one million Rupees) and other entities not established or registered under the Companies Act, 2017.As per section 223 ‘Financial Statements’ of the Companies Act, 2017, the companies having paid up capital less than one million rupees are not required to get their financial statements audited by the auditor. However, for tax purposes all companies have to submit their audited financial statements together with the return to FBR.
It is important to remind the members that audit of financial statements are required to be conducted as per ISAs issued by IAASB and adopted by ICAP. Therefore, the auditor’s reports issued on the financial statements should comply with the requirements of such standards regardless of whether such audits are conducted under the requirements of the Companies Act or any other applicable law or regulations. Members are also advised to mention UDIN on all auditor’s reports issued in respect of general purpose financial statements to comply with ICAP Directive 4.27.