IAASB proposes substantial revisions to auditor responsibilities for 'other information'

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15 Nov, 2012

The International Auditing and Assurance Standards Board (IAASB) has released an exposure draft of a revised International Standard on Auditing (ISA) on the auditor's responsibilities in relation to 'other information' included in documents containing or accompanying the entity’s audited financial statements.

Some of the proposals in the exposure draft, ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon, include:

  • Clarification and expansion of scope of the documents considered "other information", reflecting changes in financial reporting over recent years
  • Extending the auditor’s responsibilities (i.e. the work effort) to include not only reading the other information for consistency with the audited financial statements but also reading and considering the other information for consistency with the auditor’s understanding of the entity and the environment acquired during the course of the audit
  • New suggested auditor reporting responsibilities with respect to other information, including an explicit statement in the audit report providing a description of the auditor’s responsibilities with respect to that information, identification of the specific documents in which it is contained, and whether the auditor has identified material inconsistencies in the other information.

The IAASB acknowledges the proposals in the exposure draft represent a substantive revision and is proposing a 12-15 month transition period after making the standard available before it would be mandatorily applied.

Comments on the exposure draft close on 14 March 2013.  Click for press release (link to IFAC website).

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