SA 720(R) – THE AUDITOR’S RESPONSIBILITY IN RELATION TO

OTHER INFORMATION IN DOCUMENTS CONTAINING AUDITED FS

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AUDITOR’S
OBJECTIVES
a. To consider such documents
material inconsistency
between:
• the other information
and F.S.;
• the other information
and the auditor’s
knowledge obtained in
the audit;
b. To respond appropriately
when material information and the auditor’s knowledge obtained
inconsistencies appear to
exist, or when becomes
aware of such MM; and
c. To report in accordance
with this SA.
OBTAINING THE OTHER INFORMATION
a. Discuss with management, which document(s) comprises RESPONSE OF AUDITOR
the annual report and manner and timing of issuance
of
(a) Responding When a Material Inconsistency Appears
b. Make appropriate arrangements with management to to Exist or Other Information Appears to Be Materially
obtain Final version of documents Misstated:
c. If document is not available ask WR from management • shall discuss the matter with management and, if
necessary, perform other procedures to conclude
READING AND CONSIDERING THE which type of MM of other information exists
OTHER INFORMATION
a. Consider material inconsistency between the
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(b) Responding When the Auditor Concludes that a
Material Misstatement of the Other Information Exists:
other information and the financial statements. • in other information obtained prior to the date of
b. Consider material inconsistency between the other the auditor’s report-
a. request management for correction
in the audit. b. If management agrees to make the correction
c. While reading the other information the auditor determine that the correction has been made
shall remain alert for indications that the other
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c. If management refuses to make the correction,
information not related to the financial statements communicate to TCWG and request that the
or the auditor’s knowledge obtained in the audit correction be made
appears to be materially misstated d. the other information is not corrected after
communicating with TCWG
- Consider the implication on auditors report and

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MISSTATEMENT OF their communication to TCWG
THE OTHER - Withdrawing from the engagement if L& R Permits
INFORMATION - If L& R doesn’t permits then issue report as per such
A misstatement of the other L &R
information exists when the • in other information obtained after the date of the
other information is auditor’s report: a,b and c as above
incorrectly stated or d. considering the auditor’s legal rights and
otherwise misleading obligations, to seek to have the uncorrected
material misstatement appropriately brought to
the attention of users

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OTHER INFORMATION
Financial or non-financial
information (other than
financial statements and the
auditor’s report thereon)
included in an entity’s annual
report
(c) Responding When matter is unrelated to Financial
Statement or Auditor’s Understanding:
• Based on management’s further information the
REPORTING auditor may be satisfied that a material inconsistency
The auditor’s report shall include a separate section with a heading no longer appears to exist
“Other Information”, or other appropriate heading, when, at the date of • When the auditor is unable to conclude that a
the auditor’s report: material inconsistency no longer appears to exist-
• For an audit of financial statements of a listed entity, the auditor 1. request management to consult with a qualified
has obtained, or expects to obtain, the other information; or third party
• For an audit of financial statements of an unlisted corporate entity, 2. Withdrawing from the engagement if L& R Permits
the auditor has obtained some or all of the other information.

1 STANDARDS ON AUDITING: BY CA SARTHAK JAIN Buy Books and Pen Drive Online at www.elearn.fast.edu.in | Contact for Batches at Our Centre in your city 95845 10000, 9522564050 | FAST at 87 Centres across India

MM = Material Misstatement WR = Written Representation L&R = Law & Regulations

 Matters to be included in Other
7.1 Information Section of
Auditors Report Qualified Opinion Due to a MM in F.S.
a. A statement of management’s consideration may be given as to whether the other information is also
responsibility for the other information; materially misstated for the same matter giving rise to the qualified
b. An identification of: opinion on the F.S.
o Other information, if obtained prior to
the date of the auditor’s report; and
o For audit of F.S. of a listed entity, other
information, expected to be obtained Qualified Opinion Due Limitation of Scope
after the date of the auditor’s report;
c. A statement that the auditor’s opinion The auditor may need to modify the statement
required by point (e) to refer to the auditor’s inability

7.2
does not cover the other information;
d. A description of the auditor’s to consider management’s description of the matter in
responsibilities the other information
e. Other information obtained prior to the
date of the auditor’s report, either: Reporting Implications When
o A statement that the auditor has
nothing to report; or the Auditor’s Opinion on the
o If the auditor has concluded that there Financial Statements is Adverse Opinion
is an uncorrected MM of the other
information, a statement that describes Qualified or Adverse The auditor may need to appropriately modify the
statement required by point (e) for example, to
the uncorrected MM
indicate that amounts or items in the other
information is materially misstated for the same
matter

Reporting Prescribed by
7.3 Law or Regulation
Disclaimer of Opinion
The auditor’s report shall refer to SA’s only if
In those circumstances, as required by SA 705 (Revised),
the auditor’s report includes, at a minimum:
the auditor’s report does not include a section
• Identification of the other information
addressing the reporting requirements under this SA
obtained prior to the date of the auditor’s
report;
• A description of the auditor’s
responsibilities with respect to the other
information; and 8 Documentation
• An explicit statement addressing the • Documentation of the procedures performed under this SA; and
outcome of the auditor’s work for this • The final version of the other information on which the auditor has performed
purpose the work required under this SA.

2 STANDARDS ON AUDITING: BY CA SARTHAK JAIN Buy Books and Pen Drive Online at www.elearn.fast.edu.in | Contact for Batches at Our Centre in your city 95845 10000, 9522564050 | FAST at 87 Centres across India