ISA 710 - COMPARATIVE INFORMATION - CORRESPONDING FIGURES Flashcards
ISA 710
ISA 710
COMPARATIVE INFORMATION - CORRESPONDING FIGURES
Comparative financial information is the amounts and disclosures included in the FS IN RESPECT OF ONE OR MORE PRIOR PERIODS in accordance with the applicable financial reporting framework.
Auditor’s responsibilities
- To evaluate whether the comparative information agrees with the amounts and other disclosures presented in the prior period or, when appropriate, have been restated.
- To evaluate whether the accounting policies reflected in the comparative information are consistent (IAS 8) with those applied in the current period or, if there have been changes in accounting policies, whether those changes have been properly accounted for and adequately presented and disclosed
ISA 710
The Auditor’s Report
Initial engagement … previously audited
SITUATION 1 - Initial engagement … previously audited
For corresponding figures, in the circumstances where the PRIOR PERIOD F/S WERE AUDITED BY A PREDECESSOR auditor & there is no prohibition by law or regulation from referring to the predecessor auditor’s report on the corresponding figures, the auditor MAY STATE in an **Other Matter **paragraph in the auditor’s report:
(a) that the financial statements of the prior period were audited by the predecessor auditor.
(b) the type of opinion expressed by the predecessor auditor and, if the opinion was modified, the reasons therefore; &
(c) the date of that report
Other Matter – Initial engagement
The financial statements of ABC Company for the year ended December 31,20X4 were audited by another auditor who expressed an unmodified opinion on those statements on March 31,20X5
OR
The financial statements of ABC Company for the year ended December 31,20X4 were audited by another auditor who expressed a modified opinion on those statements on March 31,20X5
The matter was subsequently resolved. Related adjustments are explained in Note 32. These adjustments have been audited and appropriately applied retrospectively.
Comment: OMP only in the year of initial engagement!
Applied retrocpetively: in R/E
ISA 710
The Auditor’s Report
Initial engagement … previously UNaudited
SITUATION 2 - Initial engagement … previously UNaudited
For both corresponding figures and comparative financial statements, if the PRIOR PERIOD F/S WERE NOT AUDITED, the auditor is REQUIRED to state this in an **Other Matter **paragraph.
Even after making such a statement, the auditor needs to obtain ‘sufficient appropriate audit evidence that the opening balances do not contain misstatements that materially affect the current period’s financial statements’ (ISA 510)
Other Matter – Initial engagement
The financial statements of ABC Company for the year ended December 31, 20X4 were unaudited.
ISA 710
The Auditor’s Report
Subsequent year audits
SITUATION 3 - subsequent year audits
The main question to ask is: ‘Does the auditor’s report explicitly refer to the comparative information?’
When corresponding figures are presented, ‘the auditor’s opinion DOES NOT refer to the corresponding figures because the auditor’s opinion is on the current period’s financial statements as a whole, including the corresponding figures’
