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Interpretation and Application of International Standards on Auditing by Steven Collings

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APPENDIX 3

ILLUSTRATIVE FINANCIAL STATEMENTS

The following illustrative financial statements are based on fictitious entities. The illustrative financial statements are intended to illustrate the respective disclosures concerning a published set of financial statements, and it is important that readers use reputable disclosure checklists and not rely wholly on these illustrative financial statements as legislation and accounting standards in various jurisdictions frequently change.

The following illustrative financial statements relate to a small entity reporting under IFRS.

LUCAS INC

Chairman's Statement for the Year Ended 31 May 2009

In the twelve months to 31 May 2009, the company has achieved a number of strategic and operating milestones although this was against the background of a severe global recession and a sustained reduction of our output within the industry as a whole. The key milestones were:

  • The award of a multi-year contract with Gabriella Enterprises Inc, a leading supplier of high performance tyres within the European aftermarket, which is forecast to yield revenues of $300,000–$450,000 per annum in future years.
  • Accreditation under ISA 9001.
  • Completion of the Lucas Inc manufacturing project which provides the capability of carbon infiltration of discs in-house and contributes to the reduction in manufacturing costs of approximately 20% for an automotive brake disc.
  • A further $100,000 contract from Alicia Enterprises Inc, the European leader in engin-eering ...

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