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APES 205:

Conformity with Accounting Standards Fact Sheet






Objective
APES 205 Conformity with Accounting Standards (the Standard) sets out mandatory requirements and guidance for
members. Members must comply with the relevant financial reporting framework applicable to their relevant jurisdiction
when they prepare, present, audit, review or compile general purpose financial statements or special purpose financial
statements.

Scope and application
APES 205, which took effect on 1 J uly 2008, requires members in Australia to adhere to its mandatory requirements
whilst members outside of Australia are required to comply with the financial reporting framework applicable to the
relevant jurisdiction, unless they are preparing financial statements in accordance with the Australian financial reporting
framework.

Fundamental responsibili ties of members
APES 205 requires members to observe and comply with their public interest obligations when they prepare, present,
audit, review or compile financial statements. Members must ensure they meet their professional obligations established
in Section 130 - Professional Competence and Due Care of APES 110 Code of Ethics for Professional Accountants. The
Standard stipulates that members must have the requisite professional knowledge and skill or, if they do not have the
necessary expertise, they must engage a suitably qualified external person.

Responsibiliti es of members in respect of the reporting entity concept
APES 205 refers members to Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity and the
Framework for the Preparation and Presentation of Financial Statements which provides guidance on circumstances in
which an entity will be considered a reporting entity. Members who are responsible for preparing financial statements of
reporting entities are required to prepare general purpose financial statements.

Responsibiliti es of members in respect of general purpose financi al statements
APES 205 requires that members take all reasonable steps to comply with Australian accounting standards when they
prepare, present, audit, review or compile general purpose financial statements which purport to comply with the
Australian Financial Reporting Framework.

Where members are unable to ensure that general purpose financial statements are prepared in accordance with
Australian accounting standards, they have an obligation to take reasonable steps to ensure that appropriate disclosures
are made in the financial statements. Where legislation, ministerial directive or other government authority requires a
departure from the Australian accounting standards members must disclose that fact as the reason for departure in the
general purpose financial statements.

Responsibiliti es of members in respect of special purpose financi al statements
Where special purpose financial statements are prepared, members have a professional obligation to ensure the following
matters are disclosed:

that the financial statements are special purpose financial statements
the purpose for which the special purpose financial statements are prepared
the significant accounting policies adopted.









APES 205:
Conformity with Accounting Standards Fact Sheet





Where members are unable to ensure proper disclosure of departures from Australian accounting standards, APES 205
states that members should discuss the matter with an appropriate level of management and document the results of
these discussions.

Members in public practi ce
APES 205 requires members to take reasonable steps to ensure clients have complied with Australian accounting
standards when performing an audit or review engagement or a compilation engagement of general purpose or special
purpose financial statements.

Where members in public practice have been engaged to provide audit, review or compilation services and are unable to
ensure that clients have complied with the applicable financial reporting framework, the members have a professional
obligation to consider relevant Australian auditing standards applicable to audit or review engagements or professional
standards applicable to compilation engagements.

Refer to the Standard for information concerning:

definitions.








Disclaimer
The above material is only general in nature and not intended to be specific to the readers circumstances. The material does not relieve you of your
obligation, as a member of CPA Australia, to ensure that you comply with professional standards. To keep up-to-date members should visit the APESB
website at apesb.org.au.

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Issued November 2012