The introduction of IFRS 16 has transformed lease accounting, requiring companies to recognize right-of-use (ROU) assets and lease liabilities for most leases. This shift enhances financial transparency but introduces complexities in measurement and reporting. Auditors play a critical role in verifying IFRS 16 compliance, ensuring accurate lease classification, correct discount rate application, and proper financial disclosures. This guide explores accounting entries, lease modifications, financial impact, and audit pitfalls, with practical examples to help auditors navigate the IFRS 16 review process effectively.
