Annual Audit Manual
COPYRIGHT NOTICE — This document is intended for internal use. It cannot be distributed to or reproduced by third parties without prior written permission from the Copyright Coordinator for the Office of the Auditor General of Canada. This includes email, fax, mail and hand delivery, or use of any other method of distribution or reproduction. CPA Canada Handbook sections and excerpts are reproduced herein for your non-commercial use with the permission of The Chartered Professional Accountants of Canada (“CPA Canada”). These may not be modified, copied or distributed in any form as this would infringe CPA Canada’s copyright. Reproduced, with permission, from the CPA Canada Handbook, The Chartered Professional Accountants of Canada, Toronto, Canada.
8022 Comparative information
Oct-2012
In This Section
Overview
This topic explains:
- The audit procedures required in respect of comparative information.
CAS Requirement
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 (CAS 710.7):
(a) The comparative information agrees with the amounts and other disclosures presented in the prior period or, when appropriate, have been restated; and
(b) 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.
If the auditor becomes aware of a possible material misstatement in the comparative information while performing the current period audit, the auditor 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, the auditor shall also follow the relevant requirements of CAS 560. If the prior period financial statements are amended, the auditor shall determine that the comparative information agrees with the amended financial statements (CAS 710.8).
As required by CAS 580, the auditor shall request written representations for all periods referred to in the auditor's opinion. The auditor shall also obtain a specific written representation regarding any restatement made to correct a material misstatement in prior period financial statements that affect the comparative information (CAS 710.9).
CAS Guidance
In the case of comparative financial statements, the written representations are requested for all periods referred to in the auditor's opinion because management needs to reaffirm that the written representations it previously made with respect to the prior period remain appropriate. In the case of corresponding figures, the written representations are requested for the financial statements of the current period only because the auditor's opinion is on those financial statements, which include the corresponding figures. However, the auditor requests a specific written representation regarding any restatement made to correct a material misstatement in the prior period financial statements that affect the comparative information (CAS 710.A1).
OAG Guidance
The audit procedures regarding comparative information are generally the same whether reporting under the corresponding figures approach or comparative financial statements approach, with the exception of the difference in the time period that needs to be covered in the written representations.
When the financial statements of the prior period were not audited, or have been audited by another auditor, we assess whether the comparative information presented meets the conditions specified above. For further guidance on audit procedures for opening balances in an initial engagement see OAG Audit 3052.
For detailed guidance on evaluating the results of our audit procedures regarding the comparative information and the reporting implications for:
- Corresponding figures in continuing audit engagements;
- Comparative financial statements in continuing audit engagements;
- Additional reporting considerations regarding comparative information in first year audits.
refer to CAS 710.
Related Guidance
See OAG Audit 9044 for guidance on addressing facts which become known to the auditor after the financial statements have been issued.
See OAG Audit 9031 for guidance on audit procedures for financial statements.
See OAG Audit 9050 for further guidance on management representation letters.