Paps- 1003ph Essay

6580 Words Jun 14th, 2016 27 Pages
Auditing and Assurance Standards Council

Philippine Auditing Practice Statement 1003Ph

GUIDANCE IN DEALING WITH REPORTS
REQUIRED BY THE SEC RELATING TO
INCREASE IN AUTHORIZED CAPITAL STOCK
OF A CORPORATION

PAPS 1003Ph
PHILIPPINE AUDITING PRACTICE STATEMENT 1003Ph
GUIDANCE IN DEALING WITH REPORTS REQUIRED
BY THE SEC RELATING TO INCREASE IN AUTHORIZED
CAPITAL STOCK OF A CORPORATION
CONTENTS
Paragraph
Introduction…………………………………………………………………

1-2

Objective……………………………………………………………………

3

Types of Engagements that May be Performed……………………………..

4-14

Acceptance of an Engagement Relating to Increase in
Authorized Capital Stock………………………………………………..

15-16

Defining the Terms of an Engagement to Perform Agreed-Upon
…show more content…
This PAPS of the AASC is not based on a specific International Auditing Practice
Statements (IAPS) issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants but was issued to address a specific situation in the Philippines.

3

PAPS 1003Ph

Introduction
1.

The Securities and Exchange Commission (SEC) laid down certain basic reporting requirements for request for approval of application by a corporation for increase in its authorized capital stock involving cash payments for stock subscriptions and conversion of advances or liabilities to equity. In these cases, the submission of audited financial statements of the entity as of the last fiscal year is a basic requirement. 2.

Oftentimes, the SEC requires a report1 from an auditor in connection with a corporation’s application for increase in its authorized capital stock. The type of this report will depend upon:


the kind of payments made for the subscriptions, which may be in the form of cash, conversion of advances/ liabilities to equity, or both;



the timing of the approval of the proposed increase in authorized capital stock; or



whether or not the applicable information shown in the latest audited financial statements of the

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