Other Information and Supplementary Information

Question 1

what phrases to remember about Other Information paragraph?

Answer 1

• Management is responsible for the other information
• ….Our opinion on the FS does not cover the other information, and we do not express an opinion or any form of assurance thereon
• Auditor’s responsibility is to READ the other information and consider whether a material inconsistency exists

Question 2

what phrases to remember about supplementary information paragraph?

Answer 2

• …the supplementary information is presented for purposes of additional analysis and is NOT a required part of the FS
• management’s responsibility
• …In our opinion, the information is fairly stated in all material respects in relation to the FS as a whole.
• Auditor is responsible for PERFORMING certain LIMITED PROCEDURES on supplementary information and for adding a separate “supplementary information” section to the audit report when auditor’s responsibility is outside of the basic FS but required by GASB, GAAP, or FASB

Question 3

what effect of modifications to the audit report for nonissuers?

Answer 3

• If the auditor concludes that the supplementary information is materially misstated, the auditor should modified the opinion
• if the auditor’s report contains an adverse or disclaimer opinion, the auditor is PROHIBITED from expressing an opinion on the supplementary information

Question 4

what effect of modifications to the audit report for issuers?

Answer 4

• If the auditor concludes that the supplementary information is materially misstated, the auditor should modified the opinion
• if the auditor’s report contains an adverse or disclaimer opinion, the auditor should also express the same opinion on the supplementary information (if supplementary info was derived from and relates directly to the info used to prepare the FS) or separate section

Question 5

What are PCAOB standards/guidance regarding adding an explanatory paragraph for public companies?

Answer 5

• PCAOB do not require auditors to add an explanatory paragraph to the audited FS to refer to the supplementary information, EXCEPT if:
  1. the required information is omitted
  2. there are material departures from the prescribed guidelines
  3. the auditor is unable to complete prescribed procedures
  4. there are unresolved doubts about conformance of required supplementary information

Question 6

what should an auditor do when client includes a separate management report that contain additional information?

Answer 6

the auditor should READ the additional management report to determine that it is consistent with the audited FS

Question 7

what is auditor’s responsibility for REQUIRED supplementary financial information?

Answer 7

the auditor is REQUIRED to perform limited procedures on REQUIRED supplementary information

Question 8

what is other information?

Answer 8

Other information is defined as financial and nonfinancial information (other than the financial statements and the auditor’s report thereon) that is included in a document containing audited financial statement and the auditor’s report, excluded required supplementary information