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auditing question

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Swati asked about 2 years ago

the extent of audit procedure performed on corresponding figure is less compared to audit of current period figures,reportingjustify the statement with regard to auditors duties for reporting of comparatives under sa 710?

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Anil Dhawan answered about 2 years ago

When the comparatives are presented as corresponding figures, the auditor's report should not specifically identify comparatives because the auditor’s opinion is on the current period financial statements as a whole, including the corresponding figures. However, the auditor’s report would make specific reference to the corresponding figures in the circumstances described in paragraphs 11, 12, 14(b), 15 and 16. 11. When the auditor’s report on the prior period, as previously issued, included a qualified opinion, disclaimer of opinion, or adverse opinion and the matter which gave rise to the modification in the audit report is: (a) unresolved, and results in a modification of the auditor’s report regarding the current period figures, the auditor’s report should also be modified regarding the corresponding figures; or (b) unresolved, but does not result in a modification of the auditor’s report regarding the current period figures, the auditor’s report should be modified regarding the corresponding figures. Illustrative audit reports for situations discussed above are given in Appendix II to this AAS. 12. When the auditor’s report on the prior period, as previously issued, included a qualified opinion, disclaimer of opinion, or adverse opinion and the matter which gave rise to the modification is resolved and properly dealt with in the financial statements, the current report does not ordinarily refer to the previous modification. However, if the matter is material to the current period, the auditor may include an emphasis of matter paragraph dealing with the situation. 13. In performing the audit of the current period financial statements, the auditor, in certain unusual circumstances, may become aware of a material misstatement that affects the prior period financial statements on which an unmodified report has been previously issued. 14. In such circumstances, the auditor should examine that: (a) appropriate disclosures have been made; or (b) if appropriate disclosures have not been made, the auditor should issue a modified report on the current period financials modified with respect to the corresponding figures included therein. 15. If, in the circumstances described in paragraph 13, appropriate disclosures have been made in the current period financial statements, the auditor may include an emphasis of matter paragraph describing the circumstances and referencing to the appropriate disclosures. Appropriate disclosures could be in the form of proforma comparative information being presented in the notes to the financial statements. Proforma comparative information would help the reader of the financial statements to clearly perceive the effect of misstatement on the corresponding figures

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered about 2 years ago

> the extent of audit procedure performed on corresponding figure is > less compared to audit of current period figures,reportingjustify the > statement with regard to auditors duties for reporting of comparatives > under sa 710? -- When the auditor's report on the prior period, as previously issued, included a qualified opinion, disclaimer of opinion, or an adverse opinion and the matter which gave rise to the modification in the audit report is unresolved, the auditor shall modify the auditor's opinion on the current period's financial statements. In the Basis for Modification paragraph in the auditor's report, the auditor shall either: (a) Refer to both the current period's figures and the corresponding figures in the description of the matter giving rise to the modification when the effects or possible effects of the matter on the current period's figures are material; or (b) In other cases, explain that the audit opinion has been modified because of the effects or possible effects of the unresolved matter on the comparability of the current period's figures and the corresponding figures.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 megha answered about 2 years ago

Hello, > The extent of audit procedure performed on corresponding figure is less compared to audit of current period figures', reporting. Justify the statement with regard to auditor's duties for reporting of comparatives under SA 710. **Answer** **Comparatives: As per SA 710 "Comparative Information—Corresponding Figures and Comparative Financial Statements" the following are the broad principles"** **(i)** The auditor should obtain sufficient appropriate audit evidence about whether the comparative information included in the financial statements has been presented, in all material respects, in accordance with the requirements for comparative information in the applicable financial reporting framework. **(ii)** When corresponding figures are presented, the auditor's opinion shall not refer to the corresponding figures because the auditor's opinion is on the current period financial statements as a whole, including the corresponding figures. **(iii)** When the auditor's report on the prior period, as previously issued, included a qualified opinion, disclaimer of opinion, or an adverse opinion and the matter which gave rise to the modification in the audit report is unresolved, the auditor shall modify the auditor's opinion on the current period's financial statements. In the Basis for Modification paragraph in the auditor's report, the auditor shall either: **(a)** Refer to both the current period's figures and the corresponding figures in the description of the matter giving rise to the modification when the effects or possible effects of the matter on the current period's figures are material; or **(b)** In other cases, explain that the audit opinion has been modified because of the effects or possible effects of the unresolved matter on the comparability of the current period's figures and the corresponding figures. **(iv)** 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, the auditor shall verify whether the misstatement has been dealt with as required under the applicable financial reporting framework and, if that is not the case, 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. **(v)** If the prior period financial statements were not audited, the auditor shall state in an Other Matter paragraph in the auditor's report that the corresponding figures are unaudited. Such a statement does not, however, relieve the auditor of the requirement to obtain sufficient appropriate audit evidence that the opening balances do not contain misstatements that materially affect the current period's financial statements.

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