ISA 710 DEALS with the auditor’s responsibilities RELATING to comparative information in an ‘Audit‘ of Financial Statements.
Table of Contents
ISA 710 – Introduction
1. Scope of this ISA
It STATES that when the financial statements of the prior period have been audited by a predecessor auditor or were not audited, the Requirements and guidance in ISA 510 regarding opening balances also apply.
2. Effective Date
This ISA is EFFECTIVE for audits of financial statements for periods beginning on or after December 15, 2009.
ISA 710 – Objectives
The Objectives of the ‘Auditor’ are:
- To OBTAIN sufficient appropriate audit evidence about whether the comparative information included in the financial statements has been presented in all Material respects; AND
- To REPORT in accordance with the auditor’s reporting responsibilities.
ISA 710 – Definitions
1. Corresponding Figures
‘Comparative Information’ where amounts and other disclosures for the prior period are included as an INTEGRAL part of the current period financial statements.
2. Comparative Financial Statements
‘Comparative Information’ where amounts amounts and other disclosures for the prior period are included for COMPARISON with the financial statements of the current period.
ISA 710 – Requirements
1. Audit Procedures
| The Auditor Shall EVALUATE Whether: |
|---|
| (a) The comparative information agrees with the amounts and other disclosures presented in the prior period or when appropriate have been Restated; AND |
| (b) The accounting policies reflected in the comparative information are consistent with those applied in the current period. |
2. Audit Reporting
2.1 (a) Corresponding Figures
When ‘Corresponding Figures’ are presented, the auditor’s opinion shall NOT REFER to the corresponding figures.
If the auditor’s report on the Prior Period as previously issued included a ‘QUALIFIED‘ opinion, a ‘DISCLAIMER‘ of opinion or an ‘ADVERSE‘ opinion and the Matter which gave rise to the Modification is unresolved, the auditor shall MODIFY the auditor’s opinion on the current period’s financial statements.
If the Auditor obtains audit evidence that a ‘Material Misstatement‘ exists in the Prior Period ‘Financial Statements’ on which an ‘UNMODIFIED‘ opinion has been previously issued and the Corresponding Figures have not been properly restated or appropriate disclosures have not been Made, the auditor shall EXPRESS a QUALIFIED opinion or an ADVERSE opinion in the auditor’s report on the current period financial statements Modified with respect to the corresponding figures included therein.
2.2 Prior Period Financial Statements Audited by a Predecessor Auditor
The auditor shall STATE in an ‘Other Matter Paragraph’ in the auditor’s report:
- That the financial statements of the prior period were audited by the predecessor auditor;
- The type of opinion expressed and if the opinion was MODIFIED, the reasons thereof; AND
- The date of that report.
2.3 Prior Period Financial Statements Not Audited
The auditor shall STATE in an ‘Other Matter Paragraph’ in the auditor’s report that the corresponding figures are un-audited.
2.4 (b) Comparative Financial Statements
When ‘Comparative Financial Statements’ are presented, the auditor’s opinion shall REFER to each period for which financial statements are presented and on which audit opinion is expressed.
If the Auditor’s opinion on such Prior Period ‘Financial Statements’ DIFFERS from the opinion the auditor previously expressed, the auditor shall DISCLOSE the substantive reasons for the different opinion in an ‘Other Matter Paragraph’ in accordance with ISA 706 (Revised).
Synopsis
ISA 710 ‘Comparative Information—Corresponding Figures and Comparative Financial Statements‘ DEALS with the auditor’s responsibilities relating to comparative information in an ‘Audit’ of Financial Statements.
[700-799] Audit Conclusions and Reporting
Chartered Accountant – ICAP
Bachelor of Accounting (Honours) – AeU, Malaysia