Zakat deduction on dividend and audit report

[bilal azhar]

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.

[kamranACA]

Bilal,

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

Regards,


KAMRAN.

[bilal azhar]

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?

[kamranACA]

Dear,

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

Regards,


Kamran.