REPORTING ON COMPARATIVE INFORMATION PSA 710 has identified two financial reporting frameworks for comparatives: COMPARATIVE FINANCIAL

STATEMENTS Amounts and other disclosures for the preceding period are included for comparison with the Financial Statements of the current period, but do not form part of the current period Financial Statements -the auditor should issue a report in which the comparative Financial Statements are specifically identified because the auditors opinion is expressed individually on the Financial Statements of each period presented. Can be illustrated under the following scenarios: Prior Period Financial Statements audited by a Continuing Auditor -auditors report should cover the current years Financial Statements as well as those for the prior periods that were audited by the firm -auditor should update his report on the Financial Statements of the prior period to determine if the report is still appropriate. Updating the report involves either: *re-expressing the opinion originally issued; or *expressing an opinion different from the one originally issued When a continuing auditors updated report on prior years Financial Statements is different from the report previously issued, the auditors report should include an Other Matter Paragraph stating: -the fact that the updated report is different from the previous opinion; -the date of the prior years report; -the type of opinion previously issued; and -the reasons for changing the auditors opinion Prior Period Financial Statements audited by another Auditor There are two reporting options: 1. The predecessor auditor reissues the audit report on the prior period Financial Statements (he must take steps to determine whether his report is still appropriate) -comparing the current period Financial Statements with the Financial Statements audited -a discussion with the successor auditor about any circumstances or events that may affect the Financial Statements of the prior period -obtaining a letter of representation from the successor auditor *the predecessors report will be reissued bearing the original date and original wording of such report 2. The predecessor auditor does not want to reissue his report on the prior period Financial Statements (the successor auditors report on the current years Financial Statements should include an Other Matter Paragraph stating) -the fact that the prior period Financial Statements were audited by another auditor

-the date of the predecessor auditors report -the type of opinion issued by the predecessor auditor and if the opinion is modified, the reasons therefore Prior Period Financial Statements not Audited -auditor should state in the report on the current years Financial Statements that the comparative Financial Statements are UNAUDITED -should perform appropriate procedures to provide reasonable assurance that the prior period Financial Statements do not contain material misstatements that could affect the Financial Statements of the current period CORRESPONDING FIGURES Where amounts and other disclosures for the preceding period are included as part of the current period Financial Statements, and are intended to be read in relation to the amounts and other disclosures relating to the current period. These corresponding figures are not presented as complete Financial Statements capable of standing alone, but are an integral part of the current period Financial Statements intended to be read only in relationship to the current period figures. -auditor should issue a report that refers only to the Financial Statements of the current figure -the comparatives are not specifically identified because the auditors opinion is on the current periods Financial Statements as a whole (including the corresponding figures) The Auditors Responsibility to Other Information in Documents Containing Audited Financial Statements (PSA 720) An entity may publish many documents like annual reports that contain Other Information in addition to audited Financial Statements and auditors report. The following guidelines must be observed. Reading other Information -to identify material inconsistencies with the audited Financial Statements Material Inconsistencies -exist when the other information contradicts the information contained in the audited Financial Statements -auditor shall determine whether the audited Financial Statements or the other information needs to be revised When the auditor identifies a material inconsistency, he should determine whether the audited Financial Statements or the other information needs to be AMENDED -the auditor should express a qualified or an adverse opinion Material Inconsistencies Identified in Other Information Obtained Prior to the Date of the Auditors Report (PSA 705) When management refuses to make the revision, the auditor shall communicate this matter to those charged with governance; and -Include in the auditors report an Other Matter(s) paragraph describing the material inconsistency in accordance with PSA 706; or

-Withhold the auditors report; or -Where withdrawal is legally permitted, withdraw from the engagement Material Inconsistencies Identified in Other Information Obtained Subsequent to the Date of the Auditors Report (PSA 560) - When management refuses to make the revision, the auditor shall communicate this matter to those charged with governance and take any further action. Material Misstatements of Fact -exist when other information, not related to matters appearing in the Financial Statements, is incorrectly stated or presented -auditor shall discuss the matter with engagement -shall request management to consult with a qualified third party (such as entitys legal counsel) and consider the advice received If management refuses to correct -auditor shall notify those charged with governance of the auditors concern regarding the other information and take any further appropriate action like obtaining legal advice