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    ISA 720 provides guidance on the auditor's responsibilities relating to other information in documents containing audited financial statements and the auditor's report. The standard defines other information as financial and non-financial information other than the financial statements and the auditor's report. It outlines the auditor's responsibilities to communicate with management regarding other information, to read and consider other information for consistency with the financial statements and the auditor's knowledge, and the actions to be taken if a material inconsistency is identified. The standard also addresses the auditor's responsibilities relating to other information obtained before and after the date of the auditor's report.

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    ISA 720 provides guidance on the auditor's responsibilities relating to other information in documents containing audited financial statements and the auditor's report. The standard defines other information as financial and non-financial information other than the financial statements and the auditor's report. It outlines the auditor's responsibilities to communicate with management regarding other information, to read and consider other information for consistency with the financial statements and the auditor's knowledge, and the actions to be taken if a material inconsistency is identified. The standard also addresses the auditor's responsibilities relating to other information obtained before and after the date of the auditor's report.

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    49 views1 page

    ISA 720 MindMap

    Uploaded by

    A R AdIL
    ISA 720 provides guidance on the auditor's responsibilities relating to other information in documents containing audited financial statements and the auditor's report. The standard defines other information as financial and non-financial information other than the financial statements and the auditor's report. It outlines the auditor's responsibilities to communicate with management regarding other information, to read and consider other information for consistency with the financial statements and the auditor's knowledge, and the actions to be taken if a material inconsistency is identified. The standard also addresses the auditor's responsibilities relating to other information obtained before and after the date of the auditor's report.

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    CFAP 06: Audit, Assurance and Related Services Scope of ISA 720:

    ISA 720: Other Information 1. Introduction to Other Information


    Secret Sheet for Quick Revision 2. Auditor's Responsibilities regarding Other Information
    (By Muhammad Asif, FCA) 3. Auditor's Course of Action if there is inconsistency
    4. Drafting examples of Other Information in different situations

    1. Introduction 2. Auditor's Responsibilities 4. Drafting

    Definition: ① Communicate management Other Information obtained before Audit Report Other Information Some obtained
    All information in Annual Report, except expectation to obtain Other Obtained after Audit before, Some
    F/S and Audit Report. Information. Report (Case C) After (Case D)
    ② Obtain Other Information (Before
    Examples: audit report, or After audit report, No Misstatement in Misstatement in Report Modified due to Report Modified due to
    – Directors' Report, Chairman's Review or Some Before and Some After). Other Information Other Information misstatement in F/S, same scope limitation, same
    ③ Read whether it is inconsistent (Case A) (Case B) matter included in Other matter included in Other
    Matters Discussed: with F/S or Auditor's knowledge. Information (Case E) Information (Case F)
    – Financial Highlights (EPS, Revenue,
    Ratios)
    – Operating Highlights (units sold,
    summary of locations, disclosure of new
    products launched).

    When not included:


    – Disclaimer of opinion
    – For Unlisted company, Other 3. Inconsistency b/w Other Information
    information not available before report. & F/S or Auditor's Knowledge

    F/S are misstated Auditor's knowledge/understanding is deficient Other Information is Misstated


    (e.g. EPS) (e.g. new director) [whether financial or operational, whether error/omission/misleading]

    ① Discuss with Management & TCWG ① Update Undersanding Before Audit Report After Audit Report
    ② Modify Opinion ② Revise Risk (Ask management/TCWG to correct) (Ask management/TCWG to correct)
    ③ Re-evaluate effect of
    uncorrected misstatements
    on F/S and Report
    Other Information Other Information Other Information Other Information
    Corrected NOT Corrected Corrected NOT Corrected

    Check correction ① Describe misstatement in – Check Correction. Take appropriate action depending on legal rights
    "Other Information" section – No revision in report. and obligations e.g.
    ② Withdrawal or Disclaimer of – New Report
    Opinion if refusal creates doubts – Communicate Shareholders
    on Integrity of Management, and – Communicate Regulatory Authorities
    Reliability of Evidence. – Consider implications for engagement continuance

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