IAASB re-exposes proposals on an auditor's responsibilities relating to 'other information'

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23 Apr 2014

The International Auditing and Assurance Standards Board (IAASB) has published a revised exposure draft of a revised International Standard on Auditing (ISA) dealing with an auditor's responsibilities relating to 'other information'. The revised exposure draft responds to significant concerns raised in response to the IAASB's original proposals.

The IAASB issued an exposure draft for a revised International Standard on Auditing, ISA 720, The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon in November 2012.

Changes included in the revised exposure draft for a revised IAS 720, The Auditor’s Responsibilities Relating to Other Information, include:

  • Introducing a definition of an 'annual report' and limiting the scope of other information reviewed by an auditor to information contained in annual reports as defined, thereby excluding consideration of separately issued industry or regulatory reports, corporate social responsibility reports, sustainability reports, and similar documents
  • Clarifying the obligations of an auditor in respect of other information, requiring an auditor to consider whether there is a material inconsistency between the other information and the auditor's knowledge obtained during the course of audit, and requiring the auditor to remain alert for other indications that the other information appears to be materially misstated
  • Including a definition of 'misstatement' to address concerns the ordinary meaning of this word in the context of other information is subjective and could lead to divergence in practice
  • Addressing the auditor's responsibilities in relation to other information obtained after the date of the auditor's report.

Comments on the revised exposure draft close on 18 July 2014. Click for press release (link to IFAC website).

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