- 3 Marks
Question
ISA 710: Comparative information—corresponding figures and comparative financial statements deals with audit work on corresponding amounts and other comparative information for the preceding financial reporting period.
Required:
Explain THREE (3) circumstances under which the audit opinion should refer to the comparatives figures.
(3 marks)
Answer
The audit opinion shall not refer to the corresponding figures unless the following circumstances apply:
- Previous Qualified Opinion: If the auditor gave a qualified opinion for the previous financial period and the issue remains unresolved, the current year’s auditor’s report must modify the opinion.
- Material Misstatement in Prior Period: If the auditor discovers a material misstatement in the prior period’s financial statements that were previously given an unmodified opinion and the corresponding figures have not been appropriately restated, the auditor should give a qualified or adverse opinion on the current period’s financial statements regarding the corresponding figures.
- Change in Auditor: If the prior period financial statements were audited by a different auditor, the current auditor should include an “other matter” paragraph to explain this fact and the type of opinion given.
- Tags: Audit opinion, Comparative figures, Financial reporting period, ISA 710
- Level: Level 2
- Topic: Completion Procedures and Reporting
- Series: NOV 2023
- Uploader: Dotse