Page 246 - CA Inter Audit PARAM

CA Ravi Taori

QNO Comparatives-Audit Procedures Old Course -- (P16M/N17M)
710.01 Bhaskar CNO - SA710.040
What are the auditor’s responsibilities in respect of corresponding figures?
Answer ➢ Basic Evaluation of comparative information:
The Auditor shall determine whether the Financial Statements include the Comparative
Information required by the Applicable Financial Reporting Framework and whether such
information is appropriately classified.
For this Purpose, the Auditor shall evaluate whether
• The comparative Information agrees with the amounts & other disclosures
presented in the prior period, and
• The Accounting Policies reflected in the Comparative Information are consistent
with those applied in the current period or, if there have been changes in Accounting
Policies, whether those changes have been properly accounted for and adequately
presented and disclosed.

➢ Additional procedures in case of Material Misstatement:
If the Auditor of becomes aware of a possible material misstatement in the Comparative
Information while performing the current period audit, he shall perform such additional audit
procedures as are necessary in the Circumstances, to obtain sufficient appropriate audit
evidence to determine whether a material misstatement exists.
If the Auditor had audited the Prior Period’s Financial Statements, he shall also follow the
relevant requirements of SA 560 on the effect of Subsequent Events.

QNO Definition of Comparative, 2 Approaches & Differences Old Course -- (M19R)
710.03 Bhaskar CNO - SA710.020 New Course -- (N23E/J25R)
The nature of the comparative information that is presented in an entity’s financial statements depends on
the requirements of the applicable financial reporting framework. There are two different broad
approaches to the auditor’s reporting responsibilities in respect of such comparative information:

corresponding figures and comparative financial statements. Explain clearly stating the essential audit
reporting differences between the approaches. Also define comparative information and audit procedures
regarding comparative information.
Answer ➢ The nature of the comparative information that is presented in an entity’s financial statements
depends on the requirements of the applicable financial reporting framework. There are two
different broad approaches to the auditor’s reporting responsibilities in respect of such comparative
information: corresponding figures and comparative financial statements. The approach to be
adopted is often specified by law or regulation but may also be specified in the terms of engagement.

➢ The essential audit reporting differences between the approaches are:
For corresponding figures, the auditor’s opinion on the financial statements refers to the
current period only; whereas
For comparative financial statements, the auditor’s opinion refers to each period for which
financial statements are presented.

➢ Definition of Comparative information –
The amounts and disclosures included in the financial statements in respect of one or more prior
periods in accordance with the applicable financial reporting framework.

➢ Audit Procedures regarding comparative information
The auditor shall determine whether the financial statements include the comparative information
required by the applicable financial reporting framework and whether such information is
appropriately classified. For this purpose, the auditor shall evaluate whether:

www.auditguru.in 8.16