ISA 710 – Comparative info-corresponding figures and comparative financial statements

That sounds ok, but I’m struggling to imagine Lisa asking this again. Surely it’s more a matter of semantics. The difference cannot be crucial in a practical auditing sense – do you really think a client / prospective client is going to turn round to you, having been given advice on two years’ worth of fin stats, and say “But Ms Auditor, what you have explained is surely comparative figures whereas in fact I asked for an explanation of corresponding amounts”

As far as I can tell, both corresponding and comparative figures are there to allow users of the financial statements to compare current year’s financial performance with that of prior year(s)’. The difference is:

a) in the way such a comparison is presented, and
b) respective role of an auditor.

Corresponding figures are “comparative” figures presented on the face of the financial statement. For example, if you have statement of comprehensive income and a statement of financial position for the year ended 2011, but also have figures for, say, 2010 right next to the figures of 2011 (two columnar statement), you are looking at corresponding figures. Corresponding figures are hence not complete financial statements on their own, and must only be seen and evaluated in correspondance with current year’s figures. If you get confused between the two, the best way to remember this is with the very spelling of “corresponding” figures; the word “corresponding” has two “Rs”, one right next to the other, so the financial information of two years would be presented side by side too, on the face of the statement. Hence the example in your second post @marionb is an example of corresponding figures.
When the entity is issuing corresponding figures, the auditor’s role is to only cast an opinion on current year’s figures, which in our case is 2011. Their audit report will not refer to the prior year statements.

Comparative figure financial statements are slightly different. In these statements, your SOFP and SOCI will present current year figures. However, along with a complete set of current year FS, the entity will also issue prior year(s) FS attached within the same binding/book. These prior period(s) financial statements are in a complete form able of standing and being interpreted on their own and unlike corresponding figures (which are merely figures and not entire statements), do not form an integral part of the current year’s financial statements. For this reason, the auditor in his report will make references to these statements as well. The auditor may cast more than one opinion, for example, the auditor may qualify or include an emphasis of matter paragraph in relation to one statement, but may pass an unmodified report on the other statement.

There are other related issues as well, for example auditor’s response if prior period’s reports were qualified, or unaudited, or were unqualified by mistake. The key point here to understand is the differences in the auditor’s report. Both corresponding and comparative figures are there for the purpose of making a comparison, however, it is the auditor’s report that makes the major difference.

I hope the above helped you better understand the fundamental differences between the two types of statements. Happy studying, and best luck with the exams.

NB If anyone has any doubts about this, please do speak up. Above is what i could gather from my text books, but that does not guarantee the validity of my claims.

good post – it’s an area which I have never even considered important and so have never learned the difference. I’m grateful to you for educating me!

thnks buraaq it really helped me in understanding the difference 🙂