ACCA AAA ^INT Syllabus D. Audit of Historical Financial Information - Comparatives - Notes ^{40 / 41}

Audit work on comparatives is far less than current year figures.

Basically just ensure:

1) They agree with the previous period
2) Accounting policies are consistent applied in the two periods

What if a material misstatement is found in the comparative?

• Perform appropriate additional procedures

The audit opinion should not normally refer to the corresponding figures

Unless the following apply:

• Qualified opinion last time remains unresolved - Modify this year's report

• Misstatement in comparative found but not restated - Adverse opinion on comparative

• Prior period financial statements were audited by another auditor - use "other matter" paragraph to explain this

• Prior period financial statements were not audited - use "other matter" paragraph to explain this

Other Information

The other information in the accounts such as the Directors report, the Chairman’s report and the employees report are not covered by the audit.

However, the auditor must review such information and highlight any material inconsistency with the audited financial statements or material misstatements of fact.

• Material inconsistency

  If FS are wrong - and management refuse to amend - qualify the audit report due to disagreement

  If OTHER INFO is wrong - and management refuse to amend - an EOM paragraph only is needed

• Misstatement of fact

  If management refuse to amend then an EOM paragraph is needed