ISA 720 (1) Flashcards
What is meant by other information?
Financial or non-financial information (other than FSs and auditor’s report) included in an entity’s annual report
What is an annual report?
A document, or combination of documents, prepared typically on an annual basis by management or those charged with governance in accordance with law, regulation or custom
What is the purpose of the annual report?
To provide owners with information on entity’s operations and entity’s financial results and financial position as set out in the FSs
When does a misstatement of other information exist?
When other information is incorrectly stated or otherwise misleading
What causes a misstatement of other information?
As it omits or obscures information necessary for a proper understanding of a matter disclosed in the other information
What is the objective of the auditor for ISA 720?
Respond appropriately when documents containing audited FSs include other information that could undermine credibility of FSs and auditor’s report
Examples of other amounts/items that may be included as other information (strategy)
Overview of strategy
Examples of other amounts/items that may be included as other information (highlights)
Financial summaries or highlights
Examples of other amounts/items that may be included as other information (expenditure)
Planned capital expenditures
Examples of other amounts/items that may be included as other information (ratio)
Financial ratios
Examples of other amounts/items that may be included as other information (estimate)
Explanations of critical accounting estimates and related assumptions