Auditor"s report

No – “other information” means something like the directors’ report or chairman’s statements that is published with the financial statements – typically in an annual report. It’s not part of the financial statements so the auditor is not reporting on it – the true and fair opinion extends only to the financial statements.

However, because other information is published with the financial statements ISA 720 sets out the auditor’s responsibilities for it. The auditor must read it for inconsistencies – if there is inconsistency, is it (i) the financial statements or (ii) the other information that needs to be revised?

If it’s (i), because there is a material misstatement (which should be unlikely), the auditor would seek revision of the (i) and if not revised, the audit opinion would be modified (most likely qualified). But, if it’s (ii), and it’s not revised, it does not affect the audit opinion. However, the auditor has a responsibility to draw an inconsistency which may undermine the credibility of the auditor’s report to the attention of the users –
and so includes an “Other information” section in the auditor’s report to draw attention to the inconsistency.

A simple theoretical example would be the financial statements show a loss for the year and the chairman’s statement refers to a profit. If this was not drawn to the users attention, users would be left wondering if the financial statements (and auditor’s report) were credible.