Conformity with International Standards Conformity with International Standards on Auditing

Conformity with International Standards on Auditing

27 Except as noted below, this Auditing Standard conforms with International Standard on Auditing ISA 710 Comparatives, issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. The main difference(s) between this Auditing Standard and ISA 710 are:

• Paragraphs 3(b), 4(b), 5, 20 to 31, Appendix 1, Appendix 2 Examples C and E from ISA 710 are not included in this Auditing Standard as they refer to an alternative framework for comparatives.
• This Auditing Standard includes the following specific mandatory requirements which is included only as guidance in the explanatory paragraphs of ISA 710:

♦ where the comparatives have not been audited, the auditor shall encourage clear disclosure in the financial report that the comparatives are unaudited (paragraph 25).

• Both this Auditing Standard and ISA 710 identify criteria to be assessed when considering whether the comparatives are appropriately presented. However, this Auditing Standard also requires that the auditor shall evaluate the risk that comparatives may be materially misstated (paragraph 8).
• ISA 710 provides flexibility for an auditor to include an emphasis of matter paragraph in the current period’s audit report on a matter (that is material to the current period) that gave rise to an audit qualification in the previous period, but is resolved and properly dealt with in the current period. This Auditing Standard does not provide the option for an emphasis of matter in this circumstance (paragraph 16).
• This Auditing Standard prescribes as a mandatory requirement, where the auditor becomes aware of a material misstatement that affects the prior period financial report on which an unmodified report has been previously issued, and if the prior period financial report has not been revised and an auditor’s report has not been reissued, but the comparatives have been properly restated and/or appropriate disclosures have been made in the current period financial report, the auditor shall express an unmodified opinion and shall consider the mandatory requirements in ASA 560 (paragraph 19). The ISA 710 equivalent is explanatory guidance and allows the auditor to include an emphasis of matter paragraph.
• This Auditing Standard prescribes as a mandatory requirement, the circumstances where reference to a predecessor’s auditor’s report shall be made (paragraph 21). ISA 710 does not provide specific guidance on this matter. Furthermore, paragraph 21(a) requires the name of the predecessor auditor to be included when reference to the predecessor auditor’s report is made in the current period auditor’s report. ISA 710 does not have such a requirement.
• This Auditing Standard requires that where the prior period’s financial report has not been audited, and the incoming auditor is unable to obtain sufficient appropriate audit evidence regarding the comparatives, the incoming auditor shall qualify the auditor’s report on the basis that the comparatives are unaudited and that no opinion on them is expressed (paragraph 23). There is no similar requirement in the ISA 710.