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Zakat deduction on dividend and audit report
08-17-2009, 07:05 PM
Post: #1
Zakat deduction on dividend and audit report
As per IAS-10 dividend declared after the balance sheet date is a non adjusting event and should not be recorded as liabilty.only its disclosure is required. it will be should as paid in next year. now my question is

that a company has declared a dividend after the balance sheet date.it has deducted withholding tax @ 10% but has not deducted zakat @ 2.5%. para (d) of audit report says "no zakat was deductible at source under zakat and ushr ordinance,1980. do i need to change this para this year or next year.
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08-17-2009, 08:25 PM
Post: #2
 
Bilal,

If Zakat was required to be deducted and has not been deducted, auditor has to qualify/modify his opinion.

Regards,


KAMRAN.
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08-17-2009, 09:30 PM
Post: #3
 
yes i think zakat must be deducted on dividend paid even by a private company.

but why should a non adjusting event have an effect on audit report. if its proper disclosure is given then why should we qualify?
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08-18-2009, 04:32 AM
Post: #4
 
Dear,

You will qualify in the year when dividend is paid without deduction of zakat and not in the year of disclosure.

Regards,


Kamran.
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