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If there is material inconsistency between financial statements and other information and revision needed to other information, this would be highlighted in other information section in the audit report right? No more in Other Matter paragraph ?
Here’s the relevant extract:
“Other Matter Paragraphs in the Auditor’s Report
If the auditor considers it necessary to communicate a matter other than those that are presented or disclosed in the financial statements that, in the auditor’s judgment, is relevant to users’ understanding of the audit, the auditor’s responsibilities or the auditor’s report, the auditor shall include an Other Matter paragraph in the auditor’s report, provided:
(a) This is not prohibited by law or regulation; and
(b) When ISA 701 applies, the matter has not been determined to be a key audit matter to be communicated in the auditor’s report.
When the auditor includes an Other Matter paragraph in the auditor’s report, the auditor shall include the paragraph within a separate section with the heading “Other Matter,” or other appropriate heading.
Communication with Those Charged with Governance
If the auditor expects to include an Emphasis of Matter or an Other Matter paragraph in the auditor’s report, the auditor shall communicate with those charged with governance regarding this expectation and the wording of this paragraph.
OK?
If not mistaken the ISA 720 had been eliminated from the list of ISAs containing requirements for other matter paragraphs right?
Not according to this:
‘List of ISAs Containing Requirements for Other Matter Paragraphs
This appendix identifies paragraphs in other ISAs that require the auditor to include an Other Matter paragraph in the auditor’s report in certain circumstances. The list is not a substitute for considering the requirements and related application and other explanatory material in ISAs.
• ISA 560, Subsequent Events – paragraphs 12(b) and 16
• ISA 710, Comparative Information—Corresponding Figures and Comparative Financial Statements – paragraphs 13–14, 16–17 and 19
• ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements – paragraph 10(a)’
Hope that clears up an issue for you
So what would be highlighted in the ‘other information’ paragraph in the Auditor’s report?
Maybe something in the Chair’s report that is inconsistent with the financial statements?
So if there is inconsistency between chairman report and financial statements and revision needed to be made to the chairman report , previously would be dealt in ‘ Other Matter’ paragraph but now would be stated in ‘other info’ paragraph right?
Could I interpret in this way?That’s certainly how I interpret it … however ….
…. here’s an extract from the standard:
‘The auditor’s report shall include a separate section with a heading “Other Information”, or other appropriate heading, when, at the ….’
so it appears that the specific heading of ‘Other information’ is flexible
Here’s a fuller extract from the standard about the ‘Other information’ section
‘When the auditor’s report is required to include an Other Information section in accordance with the previous paragraph, this section shall include:
(a) a statement that management is responsible for the other information;
(b) an identification of:
(i) other information, if any, obtained by the auditor prior to the date of the auditor’s report; and
(ii) for an audit of financial statements of a listed entity, other information, if any, expected to be obtained after the date of the auditor’s report;
The auditor shall include in the audit documentation:
(a) documentation of the procedures performed under this ISA; and
(b) the final version of the other information on which the auditor has performed the work required under this ISA
(c) a statement that the auditor’s opinion does not cover the other information and, accordingly, that the auditor does not express (or will not express) an audit opinion or any form of assurance conclusion thereon;
(d) a description of the auditor’s responsibilities relating to reading, considering and reporting on other information as required by this ISA; and
(e) when other information has been obtained prior to the date of the auditor’s report, either:
(i) a statement that the auditor has nothing to report; or
(ii) if the auditor has concluded that there is an uncorrected material misstatement of the other information, a statement that describes the uncorrected material misstatement of the other information.
When the auditor expresses a qualified or adverse opinion in accordance with ISA 705 (Revised), the auditor shall consider the implications of the matter giving rise to the modification of opinion for the statement required in paragraph (e) above
OK?
Means that either ‘other Matter’ paragraph or ‘other information’ which is considered as a appropriate heading could be used in this case?
AND last question from me is whether the ‘other information’ paragraph includes reporting on integrated report ?May I know what r the major changes between the previous and revised ISA 720 ? Especially the auditor’s responsibility in relation to the ‘other information’ ?
‘Means that either ‘other Matter’ paragraph or ‘other information’ which is considered as a appropriate heading could be used in this case?’ – or any other heading that may be considered appropriate
Here’s a relevant extract from IAS 1:
‘Components of financial statements
A complete set of financial statements includes:
– a statement of financial position (balance sheet) at the end of the period
– a statement of profit or loss and other comprehensive income for the period (presented as a single statement, or by presenting the profit or loss section in a separate statement of profit or loss, immediately followed by a statement presenting comprehensive income beginning with profit or loss)
– a statement of changes in equity for the period
– a statement of cash flows for the period
– notes, comprising a summary of significant accounting policies and other explanatory notes
– comparative information prescribed by the standard.
An entity may use titles for the statements other than those stated above. All financial statements are required to be presented with equal prominence.
Reports that are presented outside of the financial statements – including financial reviews by management, environmental reports, and value added statements – are outside the scope of IFRSs.’
Based on that extract, an integrated report qualifies as ‘other information’
And here’s a link to a site that distinguishes pre- and post-revision ISA 720
https://www.ifac.org/system/files/publications/files/ISA-720-%28Revised%29-At-A-Glance.pdf
That should help
So there is no major changes being made from the previous ISA 720 to revised ISA 720 right?
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