Required Supplementary Information

Question 1

What is meant by the term “required supplementary information”?

Answer 1

Information that a designated accounting standard setter requires to accompany an entity’s basic financial statements (Although the information is not part of the basic financial statements, authoritative guidelines for measurement and presentation have been established.)

Question 2

Describe the procedures to be performed by the auditor when required supplementary information is associated with an entity’s audited financial statements.

Answer 2

1. )Inquire of management about the methods used to prepare the information (and whether it is presented in accordance with prescribed guidelines on a consistent basis).
2. )Compare the information for consistency with the basic financial statements and with the knowledge obtained during the audit.

Question 3

How does required supplementary information affect the auditor’s report on the entity’s financial statements?

Answer 3

The auditor should include an other-matter paragraph in the audit report to comment on required supplementary information (whether it is presented at all, and whether it is presented in accordance with the prescribed guidelines).

Question 4

What type of assurance does the auditor’s report provide on the required supplementary information presented along with the audited financial statements?

Answer 4

No assurance is given on the required supplementary information. The other-matter paragraph commenting on the required supplementary information specifically includes a disclaimer of opinion (or any other assurance) on such supplementary information.