Project Status This is a completed project. Show
To revise ISA 720,The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements to ensure that the ISA continues to be capable of enhancing the credibility of financial statements through specifying appropriate responsibilities of the auditor relating to the range of other information in documents containing audited financial information and taking account of how such information is disseminated. BackgroundDuring the Clarity redrafting of ISA 720 Other Information in Documents Containing Audited Financial Statements, and the consultations on the IAASB's Strategy and Work Program, 2009-2011, several stakeholders drew the IAASB's attention to the need to update and revise the ISA to ensure that it is sufficient and fit-for-purpose in the context of today's financial reporting environment. This view was shared by members of the IAASB Consultative Advisory Group (CAG). The IAASB considered the input received and agreed to include consideration of a proposal to revise ISA 720 in its 2009-2011 work program. The IAASB approved a project proposal at its December 2009 meeting (Agenda Item 9) - As indicated, key issues are likely to include the following:
At its March 2010 meeting, (Agenda Item 5), the IAASB considered issues to be addressed in this project, including the following:
The IAASB CAG discussed a number of these issues at its March 2010 meeting (Agenda Item N). At its September 2010 meeting (Agenda Item 8), the IAASB continued its consideration of issues to be addressed in this project, including the following:
The IAASB CAG discussed a number of these issues at its September 2010 meeting. (Agenda Item M).
At its September 2011 meeting (Agenda Item 5), The IAASB considered a revised draft of ISA 720 (Revised), The Auditor's Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and Auditor's Report Thereon. Amongst other matters, the IAASB discussed the scope and application of the proposed standard, and the auditor's work effort relating to the other information. At its December 2011 meeting (Agenda Item 11), the IAASB considered a revised draft of proposed ISA 720 (Revised). Topics discussed included: the auditor’s procedures when considering financial data in the other information; the concept of “material inconsistency;” the auditor’s action when other information is identified that is inconsistent with the auditor’s understanding of the entity and its environment; the concept of “initial release” in relation to the intended scope of the proposed standard; and documentation. The IAASB CAG discussed the project at its September 2012 meeting (Agenda Item C). At its September 2012 meeting (Agenda Item 2), the IAASB approved the exposure draft ISA 720, The Auditor's Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor's Report Thereon. The proposed standard broadens and clarifies the scope of documents to be addressed by the auditor, enhances the auditor's work effort, and introduces reporting requirements. At its April 2013 meeting, the IAASB received a brief update on the status of comment letter responses received on the Exposure Draft, Proposed ISA 720 (Revised). At its June 2013 meeting (Agenda Item 5), the IAASB held initial discussions on key issues arising from comment letter responses on the Exposure Draft of proposed ISA 720 (Revised). The IAASB CAG discussed the project at its September 2013 meeting (Agenda Item B) At its September 2013 meeting (Agenda Item 6), the IAASB discussed issues and task force recommendations in response to feedback received on its exposure draft of proposed ISA 720 (Revised). Amongst other matters, the IAASB discussed proposed revised objectives of the auditor, proposed revisions to the scope of the ISA, and proposed revised requirements addressing the auditor’s work effort and reporting. The IAASB CAG discussed the project at its March 2014 meeting (Agenda Item B) At its March 2014 meeting (Agenda Item 2), the IAASB approved for re-exposure proposed ISA 720 (Revised), The Auditor's Responsibilities Relating to Other Information. This re-exposure provides requirements and quidance on the scope of other information, the auditors work effort related to other information, and the auditor's associated reporting responsibilities. At its September 2014 meeting (Agenda Item 7), the IAASB discussed the responses received to proposed ISA 720 (Revised), The Auditor's Responsibilities Relating to Other Information and related Issues. At its October 2014 teleconference, the IAASB discussed issues related to proposed revised ISA 720. At its December 2014 meeting (Agenda Item 2), the IAASB approved ISA 720 (Revised), The Auditor's Responsibilities Relating to Other Information and related cnforming amendments. For the IAASB's post implementation activities, please refer to the Auditor Reporting Implementation page. What is the auditor's responsibility with regard the other information in documents containing audited financial statements?In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
What is an auditor's reporting responsibility concerning information accompanying the basic financial statements in an auditor submitted document?An auditor's report on information accompanying the basic financial statements in an auditor-submitted document has the same objective as an auditor's report on the basic financial statements: to describe clearly the character of the auditor's work and the degree of responsibility the auditor is taking.
What are the auditor's responsibilities for the audit of the financial statements?The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.
What is an auditor's responsibility when engaged to report on supplementary information accompanying the basic financial statements?The auditor should report on the accompanying information in either (1) an other-matter paragraph following the opinion paragraph in the auditor's report on the financial statements or (2) in a separate report on the supplementary information.
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