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Statement of Auditing Practice (SAP) 2 (Revised), Auditors and Public Offering Documents provides guidance on the general principles governing engagements relating to public offering documents. SAP 2 was revised for the purpose of incorporating revisions to the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations (“SFR”) and to better reflecting existing industry practice. The key revisions to SAP 2 include:
(a) New and updated references to the SFR 2005;
(i) Clarify that in addition to offers of listed shares, this SAP also applies to offers of securities that require a prospectus under the Securities and Futures Act (Cap. 289) (SFA), which includes offers of unlisted shares, units in business trust and debentures.
(ii) Revised definition of an auditor, which essentially refers to a public accountant under the Accountants Act.
(b) Updated requirements on audited and interim financial information to reflect the resultant financial information changes in SFR 2005, which are essentially:
(i) Requirement to provide audited consolidated or combined financial statements of the restructured group when a group restructuring has taken place;
(ii) Requirement to present interim financial statements, accompanied by an opinion from the reporting auditors, where the date of lodgement of prospectus is more than six months after the end of the most recent audited financial statements.
(c) New principles and requirements on letters of consent as required in SFR 2005 which reflect general industry practice.
(d) Additional illustrative example reports, including a report on review of interim financial statements (example 2), a report on prospective financial information where reporting auditor reviews the basis of assumptions, calculations and accounting policies (example 3) and a report on prospective financial information where reporting auditor reviews only the calculations and accounting policies (example 3a).
SAP 2 (Revised) is effective for reports dated on or after 1 January 2015.
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