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IAASB finalises proposals on an auditor's responsibilities relating to 'other information'

  • IAASB (International Auditing and Assurance Standards Board) (lt gray) Image

09 Apr 2015

The International Auditing and Assurance Standards Board (IAASB) has published its revised International Standard on Auditing (ISA) dealing with an auditor's responsibilities relating to 'other information'.

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 and re-exposed it in April 2014 in response to significant concerns raised in response to the original proposals.

The revisions aim to clarify and increase the auditor's involvement with "other information" - defined in the standard as financial and non-financial information, other than the audited financial statements, that is included in entities' annual reports. The main changes to the ISA 720 are:

  • The scope of "other information" has been broadened and clarified by linking it to the concept of an "annual report".
  • The auditor's work effort with respect to other information has been clarified to state that the auditor is required to read the other information and consider whether there is a material inconsistency between the other information and the financial statements or the other information and the auditor's knowledge obtained in the audit.
  • Transparency has been increased by requiring reporting on the auditor's work relating to other information.

The new requirements related to auditor reporting complement the changes arising from the IAASB's new and revised auditor reporting standards issued in January 2015.

The revised standard will be effective for audits of financial statements for periods ending on or after 15 December 2016.

Please click for the IAASB press release offering access to the revised standard, an At a Glance summary, and a Basis for Conclusions (all links to IFAC website).

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