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207: Financial statements must be audited
or “Companies need to have their financial statements checked by a qualified auditor”
You could also call this:

“Auditors must follow official standards when checking company finances”

When someone checks a company’s financial records, they need to follow certain rules. These rules are called auditing and assurance standards. You must follow these standards when you check a company’s finances for the official report.

If you’re checking the finances of a big company from another country, sometimes the rules might be a bit different. The person in charge of keeping track of companies (called the Registrar) might say it’s okay to use the rules from that other country instead. This can happen if the Registrar thinks the other country’s rules are about the same as New Zealand’s rules, or if they’re good enough to make sure the checking is done well.

If the Registrar says it’s okay, then the person checking the big overseas company’s finances can use the other country’s rules instead of New Zealand’s rules. They can use these different rules both when they’re checking the finances and when they’re writing their report about what they found.

But remember, these rules about using different standards don’t apply to companies that are part of the government. Those companies always have to follow New Zealand’s rules.

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Next up: 207B: Auditor must report to shareholders

or “Auditor writes a report for shareholders about company's financial statements”
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Part 11 Accounting records and financial reporting
Financial reporting: Audit of financial statements

207AAudit must be carried out in accordance with auditing and assurance standards

  1. An auditor must, in carrying out an audit for the purposes of section 207, comply with all applicable auditing and assurance standards.

  2. Subsection (3) applies if the Registrar notifies a large overseas company (A) that the Registrar is satisfied that standards relating to auditing or assurance that are in force in the country where A is incorporated or constituted (the overseas standards) are—

  3. substantially the same as the applicable auditing and assurance standards referred to in subsection (1); or
    1. sufficiently equivalent, in relation to the quality of auditing they achieve, to the applicable auditing and assurance standards referred to in subsection (1).

      1. The auditor of A's financial statements or group financial statements may, in carrying out the audit of those statements and in preparing the auditor's report, comply with the overseas standards instead of the applicable auditing and assurance standards.

      2. This section does not apply to a company that is a public entity.

      Notes
      • Section 207A: inserted, on , by section 30 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).