New York - The International Auditing and AssuranceStandards Board has proposed a new assurance standard to address the process ofcompiling pro forma financial information included in prospectuses.
Recognizing the increasingly integrated nature of globalcapital markets and the importance of pro forma financial information in thepublic's investment decisions, the newly proposed standard is designed toenhance public confidence in how such financial information is produced.
The proposed standard, Assurance Reports on the Processto Compile Pro Forma Financial Information Included in a Prospectus, deals withinformation-necessary in many forms of domestic and cross-border securitiesofferings - that illustrates the impact of an event or transaction on anissuer's financial information. It provides guidance on the nature and extentof a practitioner's work when reporting on whether the process of compiling proforma financial information has been properly followed. It also covers relatedengagement acceptance and reporting considerations, and provides anillustrative report arising from such an engagement.
The IAASB, which operates under the auspices of theInternational Federation of Accountants, is inviting comments, especially fromissuers, investors, analysts, professionals working at securities exchanges,and regulators.
To access the exposure draft or submit a comment, visitthe IAASB's Web site at www.iaasb.org/ExposureDrafts.php. Comments on theexposure draft are requested by Sept. 30, 2010.
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