ISA 810 (Revised) DEALS with the auditor’s responsibilities RELATING to an engagement to report on ‘Summary Financial Statements’ derived from Financial Statements audited in accordance with ISAs by that Same auditor.
Table of Contents
- ISA 810 (Revised) – Introduction
- ISA 810 – Objectives
- ISA 810 – Definitions
- ISA 810 – Requirements
- 1. Engagement Acceptance
- 2. Nature of Procedures
- 3. Form of Opinion
- 4. Timing of Work and Events Subsequent to the Date of the Auditor’s Report on the Audited Financial Statements
- 5. Information in Documents Containing Summary Financial Statements
- 6. Auditor’s Report on Summary Financial Statements
- 7. Restriction on Distribution or Use or Alerting Readers to the Basis of Accounting
- 8. Comparatives
- 9. Un-audited Supplementary Information Presented with Summary Financial Statements
- 10. Auditor Association
- Synopsis
ISA 810 (Revised) – Introduction
1. Scope of this ISA
It deals with the auditor’s responsibilities relating to an engagement to report on ‘Summary Financial Statements’.
2. Effective Date
This ISA is EFFECTIVE for engagements to report on ‘Summary Financial Statements’ for periods ending on or after December 15, 2016.
ISA 810 – Objectives
The objectives of the ‘Auditor’ are:
- To DETERMINE whether it is appropriate to accept the engagement to report on ‘Summary Financial Statements’; AND
- To FORM an opinion based on the conclusions drawn from evidence obtained and to EXPRESS clearly that opinion through a written report.
ISA 810 – Definitions
1. Summary Financial Statements
‘Historical Financial Information’ that is derived from financial statements but that contains LESS detail, while still providing a Structured Representation.
2. Applied Criteria
The ‘Criteria’ applied by Management in the presentation of the Summary Financial Statements.
ISA 810 – Requirements
1. Engagement Acceptance
The ‘Auditor’ shall ACCEPT, only when the auditor has been engaged to conduct an audit in accordance with ISAs of the financial statements.
2. Nature of Procedures
| The Auditor Shall PERFORM the Following Procedures: |
|---|
| (a) EVALUATE Whether the ‘Summary Financial Statements’ adequately disclose their Summarized nature and identify the audited financial statements. |
| (b) EVALUATE whether they describe clearly: – From whom or where the audited financial statements are available; OR – The law or regulation that specifies that the audited financial statements Need not be Made available to the intended users of the ‘Summary Financial Statements’. |
| (c) EVALUATE whether they adequately disclose the ‘Applied Criteria’. |
| (d) COMPARE the ‘Summary Financial Statements’ with the related information in the audited financial statements. |
| (e) EVALUATE whether they are prepared in accordance with the ‘Applied Criteria’. |
| (f) EVALUATE whether the ‘Summary Financial Statements’ contain the information necessary and are at an appropriate level of aggregation. |
| (g) EVALUATE whether the audited financial statements are available to the intended users WITHOUT undue difficulty. |
3. Form of Opinion
When the ‘auditor’ has concluded that an UNMODIFIED opinion is appropriate, the auditor’s opinion shall USE one of the following phrases:
- The accompanying ‘Summary Financial Statements’ are consistent in all material respects with the audited financial statements in accordance with [the applied criteria]; OR
- The accompanying ‘Summary Financial Statements’ are a fair summary of the audited financial statements in accordance with [the applied criteria].
4. Timing of Work and Events Subsequent to the Date of the Auditor’s Report on the Audited Financial Statements
The Auditor’s report on the ‘Summary Financial Statements‘ shall STATE that the Summary Financial Statements and Audited Financial Statements do NOT reflect the effect of events that occurred subsequent to the date of the auditor’s report on the audited financial statements.
5. Information in Documents Containing Summary Financial Statements
The ‘Auditor’ shall READ the information and CONSIDER whether there is a ‘Material Inconsistency’ between that information and the Summary Financial Statements.
6. Auditor’s Report on Summary Financial Statements
6.1 Elements of the Auditor’s Report
The auditor’s report shall INCLUDE the following Elements:
| (a) A title indicating it as the report of an ‘Independent Auditor’. |
| (b) An addressee. |
| (c) Identification of the ‘Summary Financial Statements’ INCLUDING the title of each Statement. |
| (d) Identification of the ‘Audited Financial Statements’. |
| (e) A clear expression of an opinion. |
| (f) A Statement indicating that the ‘Summary Financial Statements’ do NOT contain all the disclosures required by the applicable financial reporting framework and reading such is NOT a SUBSTITUTE for reading the ‘Audited Financial Statements’ and the ‘Auditor’s Report’ thereon. |
| (g) Reference to the auditor’s report on the ‘Audited Financial Statements‘. |
| (h) A description of Management’s responsibility for the ‘Summary Financial Statements’. |
| (i) A Statement that the auditor is RESPONSIBLE for expressing an opinion. |
| (j) The auditor’s signature. |
| (k) The auditor’s address. |
| (l) The date of the auditor’s report. |
6.2 Modified Opinion on the Summary Financial Statements
If the ‘Summary Financial Statements’ are NOT consistent in all Material respects with or are NOT a fair summary of the ‘Audited Financial Statements’ in accordance with the Applied Criteria and Management does NOT AGREE to Make the necessary changes, the auditor shall EXPRESS an ‘ADVERSE’ opinion.
7. Restriction on Distribution or Use or Alerting Readers to the Basis of Accounting
When distribution or use of the auditor’s report on the ‘Audited Financial Statements’ is Restricted or there’s an alert that such are prepared in accordance with a Special Purpose Framework, the auditor shall INCLUDE a similar RESTRICTION or ALERT on the ‘Summary Financial Statements’.
8. Comparatives
If the ‘Audited Financial Statements’ contain Comparatives but the ‘Summary Financial Statements’ do NOT, the auditor shall DETERMINE whether Such omission is reasonable.
9. Un-audited Supplementary Information Presented with Summary Financial Statements
The auditor shall EVALUATE whether such is clearly differentiated from the ‘Summary Financial Statements’.
If such is NOT clearly differentiated and Management refuses to do so, the auditor shall EXPLAIN in the auditor’s report on the ‘Summary Financial Statements’ that such information is NOT covered by that report.
10. Auditor Association
If the ‘auditor’ becomes aware that the entity plans to state that the auditor has reported on ‘Summary Financial Statements’ in a document containing such, but does NOT plan to include the related auditor’s report, the auditor shall REQUEST Management and if they refuse, the auditor shall DETERMINE and CARRY out other appropriate actions to prevent Management from inappropriately associating the auditor.
Synopsis
ISA 810 ‘Engagements to Report on Summary Financial Statements‘ DEALS with the auditor’s responsibilities relating to an engagement to report on ‘Summary Financial Statements’ derived from financial statements audited in accordance with ISAs by that Same auditor.
[800-899] Specialized Areas
Chartered Accountant – ICAP
Bachelor of Accounting (Honours) – AeU, Malaysia