Auditor’s Responsibility for AccompanyinAuditor’s Responsibility for Accompanying Information

Auditor’s Responsibility for Accompanying Information

58 The auditor shall read the other information that accompanies the interim financial report to consider whether any such information is materially inconsistent with the interim financial report.

59 If the auditor identifies a material inconsistency, under paragraph 58 of this Auditing Standard, the auditor needs to consider whether the interim financial report or the other information needs to be amended. If an amendment is necessary in the interim financial report and those charged with governance refuse to make the amendment, under paragraph 65 of this Auditing Standard, the auditor needs to consider the implications for the review report. If an amendment is necessary in the other information and those charged with governance refuse to make the amendment, the auditor may, for example, consider including in the review report an additional paragraph (emphasis of matter) describing the material inconsistency or taking other actions, such as withholding the issuance of the review report or withdrawing from the engagement. For example, those charged with governance may present alternative measures of earnings that more positively portray financial performance than the interim financial report, and such alternative measures are given excessive prominence, are not clearly defined, or not clearly reconciled to the interim financial report such that they are confusing and potentially misleading.

60 If a matter comes to the auditor’s attention that causes the auditor to believe that the other information appears to include a material misstatement of fact, the auditor shall discuss the matter with the entity’s management.

61 While reading the other information for the purpose of identifying material inconsistencies, an apparent material misstatement of fact may come to the auditor’s attention (i.e. information, not related to matters appearing in the interim financial report, that is incorrectly stated or presented). When discussing the matter with the entity’s management, ordinarily the auditor considers the validity of the other information and management’s responses to the auditor’s enquiries, whether valid differences of judgement or opinion exist and whether to request management to consult with a qualified third party to resolve the apparent misstatement of fact. If an amendment is necessary to correct a material misstatement of fact and management refuses to make the amendment, ordinarily the auditor considers taking further action as appropriate, such as notifying those charged with governance and, if necessary, obtaining legal advice.