Misstatement of Financial Assets Due to Non-Compliance with IPSAS 41
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-compliance with accounting standardsThe financial statements incorrectly reported the value of financial assets because the agency did not follow the required accounting rules for classifying, measuring, and impairing those assets, leading to a significant error in the reported amounts.
Why It Matters
Recommended Actions
- Formulate a policy on financial instruments that harmonizes with the provisions of IPSAS 41 on Financial Instruments for submission and approval of the NHA governing Board
- Accordingly. apply the policy embedded in the NHA Accounting Manual, ensuring it is compliant with IPSAS 41, for the impairment of all financial instruments of NHA
- Provide the disclosures in the FS required under IPSAS 30
- And Stay updated on changes in accounting standards to ensure compliance, assess impact on financial reporting and implement necessary changes in a timely manner.
Original Audit Finding Excerpt
"We rendered an adverse opinion on the fairness of presentation of the consolidated financial statements (FS) of the NHA as at December 31, 2023 and 2022 in view of the misstatement of the financial assets amounting to P58.836 billion and P58.101 billion as at December 31, 2023 and 2022, respectively, due to non-compliance to the provisions of IPSAS 41 on Financial Instruments, requiring classification, measurement and impairment of the financial assets."