Advanced Audit and Assurance (International) · Auditor's reports

ISA 720 Other Information and ISA 710 Comparatives in ACCA AAA

Updated 11 October 2026

ISA 720 requires you to read other information in the annual report, compare it with the financial statements and your audit knowledge, and report any uncorrected material misstatement. ISA 710 covers comparatives: you audit them, and your opinion normally refers to current-period figures only, unless a modification applies.

Understand Other Information and Comparatives (ISA 720, ISA 710)

Other information is financial or non-financial information in the annual report, outside the financial statements and your auditor's report. Examples are the directors' report, chairman's statement and strategic report. You do not give an opinion on it. But if it is wrong, it can damage the credibility of the financial statements and your report.

Under ISA 720 (Revised) your duty is to read it and consider whether it is materially inconsistent with the financial statements, or with what you learned during the audit. You also stay alert for other signs that it looks materially misstated. You obtain the other information before the date of your report where possible. If it will come later, you ask for a plan from management for when it will be issued.

If you find a material misstatement, you ask management to correct it. If they refuse, you communicate with those charged with governance. If it is still not corrected, you take appropriate action. Where the other information was obtained before the report date and the misstatement stays uncorrected, you must describe the material misstatement in the Other Information section of your report. You also consider the effect on your opinion (modifying it where the error is in the financial statements), withdrawal where law allows, and seeking legal advice.

The Other Information section is always included for listed entities, whether the other information has been obtained by the date of your report or is expected to be obtained after it. For other entities, it is included when you have obtained other information by the date of your report. Where law or regulation requires the section, you include it regardless. It states that management is responsible, that your opinion does not cover it, your responsibility to read it, and the result of your work.

ISA 710 deals with prior period figures. Corresponding figures form part of the current-period statements and are read only in relation to current amounts. Comparative financial statements are complete prior-period statements presented for comparison, and your opinion refers to each period presented. Your work is to check that the comparatives agree to the prior-period statements, that accounting policies are applied consistently, and that any restatement is properly adjusted and disclosed.

If the prior-period statements were audited by someone else, or unaudited, or your prior opinion was modified, extra reporting applies. Where a predecessor auditor audited the prior period, you may refer to this in an Other Matter paragraph, unless law or regulation prohibits it. Key point: for corresponding figures, a prior-year modification only affects your current report if the matter remains unresolved and is material to current-period figures. In that case, your current opinion is modified and refers to both the current-period figures and the corresponding figures. Also, if you find a material misstatement in the corresponding figures that has not been corrected, you modify your opinion.

Key rules to remember

Other information: core duty: Read → compare with financial statements and audit knowledge → conclude on material inconsistency or misstatement; No opinion is given on other information. This is a reading and reporting duty.
Uncorrected misstatement in other information: Ask management to correct → if refused, tell TCWG → if still uncorrected, take appropriate action; Where the other information was obtained before the report date, you must describe the uncorrected material misstatement in the Other Information section. Also consider modifying the opinion where the financial statements are affected, withdrawing where possible, and legal advice.
Uncorrected misstatement identified only after the report date: Other information obtained after report date and material misstatement found → ask management to correct → if refused, communicate with TCWG → if still uncorrected, take appropriate action, including legal advice; Where the financial statements are affected, also consider the ISA 560 implications, such as whether the report needs to be reconsidered.
Other Information section content: Listed entities: always included, whether other information is obtained by the report date or expected after it. Other entities: included when other information has been obtained by the report date. Included regardless where law or regulation requires it; Must state management's responsibility, that the opinion excludes it, your reading responsibility and the result (nothing to report, or description of the misstatement).
Corresponding figures (ISA 710): Opinion covers current period only; no separate reference to corresponding figures unless a modification or specific circumstance applies; Reference arises in two main cases. First, a prior modification is unresolved and material to current figures: the current opinion is modified and refers to both current and corresponding figures. Second, there is a material uncorrected misstatement in the corresponding figures: the opinion is modified.
Comparative financial statements (ISA 710): Opinion refers to each period presented; Used when full prior-period statements are presented.

How to solve Other Information and Comparatives (ISA 720, ISA 710) questions

Use this approach for any scenario on other information or comparatives.

1Identify what the document contains and separate the audited financial statements from the other information.
2Decide which standard applies: ISA 720 for other information, ISA 710 for prior-period figures, or both.
3State the auditor's duty: read, compare, and consider the audit knowledge, and note that no opinion is given.
4Apply to the scenario facts: quantify the inconsistency, judge materiality, and decide whether the error is in the other information or the financial statements.
5Set out the response in order: discuss with management, escalate to TCWG, then appropriate action.
6Conclude on the effect on the auditor's report: Other Information section wording, modified opinion, or withdrawal. For comparatives, state the reference needed.
7Add professional skills: be sceptical, comment on timing, and advise the client commercially.

Quickest way: Which document, which duty, what report effect

When to use it: Use when time is short and the scenario is a short paragraph describing a discrepancy or prior-year issue.

Ask: is the item inside or outside the financial statements?
If outside, name ISA 720 and say you read but do not opine.
Say whether it is a misstatement of fact or an inconsistency with the audited numbers.
Give the escalation chain: management, then TCWG, then action.
If comparatives, ask whether they are corresponding figures or full comparative statements, and whether the prior opinion was modified.
Finish with the exact effect on the report.

Common mistakes in Other Information and Comparatives (ISA 720, ISA 710)

Saying the auditor gives an opinion on other information.
Students link anything in the annual report with the audit opinion.
Fix: State that the opinion does not cover it. Your duty is to read, consider and report.
Modifying the audit opinion for every error in the chairman's statement.
Students treat all errors as audit disagreements.
Fix: Modify only if the error lies in the financial statements. Otherwise report in the Other Information section or take other action.
Skipping the escalation steps and going straight to reporting.
Students focus on the report outcome.
Fix: Show the order: management first, then TCWG, then action. Examiners award marks for the sequence.
Confusing corresponding figures with comparative financial statements.
The terms sound alike.
Fix: Corresponding figures are part of current statements and the opinion covers the current period. Comparative statements are separate full statements and the opinion covers each period.
Ignoring other information received after the report date.
Students assume the work ends when the report is signed.
Fix: If the other information arrives later, you still read it and, if a misstatement remains, take appropriate action.
Forgetting to compare the other information with audit knowledge.
Students compare only with the published numbers.
Fix: Also consider what you learned, such as going concern concerns that the strategic report ignores.

Worked examples

Example 1

You are the audit manager of Zeta Co, a listed company. The strategic report states that revenue grew by 12%. Audited revenue rose from $80 million to $84 million. Management says the wording was agreed with the board and will not change it. Explain the actions you should take and the effect on your report.

Show the solution

Recompute growth: (84 − 80) ÷ 80 = 5%. The report says 12%, so it is inconsistent with the audited financial statements.
Judge materiality: revenue growth is a headline measure to investors, and the gap is large, so it is likely to be material.
The error lies in other information, not in the financial statements, so the financial statements opinion need not change.
Ask management to correct it. They have refused.
Communicate with those charged with governance and request correction.
If it stays uncorrected, take appropriate action: describe the misstatement in the Other Information section, and consider legal advice or withdrawal if law permits.
Zeta is listed and you have obtained the strategic report, so the Other Information section is required. It must say management is responsible, the opinion excludes it, and that you have concluded there is an uncorrected material misstatement, with details.

Answer: Actual growth is 5%, not 12%. Ask management to correct, escalate to TCWG, and if uncorrected, describe the material misstatement in the Other Information section. The audit opinion on the financial statements is unaffected.

Example 2

Your firm audits Beta Co for the first time. Last year's financial statements were audited by another firm, which gave an unmodified opinion. Beta presents full comparative financial statements. Describe your work on the comparatives and the reporting implications.

Show the solution

Identify the presentation: full prior-period statements are shown, so these are comparative financial statements and your opinion refers to each period presented.
Read the prior-period financial statements and the predecessor's report.
Check that comparatives agree to the prior-period statements, or reflect any restatement properly disclosed.
Check that accounting policies are consistent with the prior period, and that any change is properly accounted for and disclosed.
Obtain evidence on opening balances under ISA 510, since this is an initial engagement.
Because the prior period was audited by a predecessor, ISA 710 allows you to refer to this in an Other Matter paragraph, provided law or regulation does not prohibit it. It is not mandatory in every case. If you include it, state that the prior-period statements were audited by another auditor, the type of opinion given (here unmodified) and the date of that report. Had the predecessor's opinion been modified, you would also give the reasons for the modification. Because no misstatement is found, your own opinion is unmodified.

Answer: Verify consistency and agreement of comparatives, and perform opening balance procedures. If no issues arise, give an unmodified opinion on each period. You may include an Other Matter paragraph, where law or regulation does not prohibit it, stating that the prior-period statements were audited by another auditor, with the type of opinion given (unmodified) and the date of the predecessor's report.

Exam tips

Link the answer to the scenario numbers. Recompute any percentage or total before commenting.
Always state that ISA 720 involves no opinion on other information.
Show the escalation ladder in order. Marks follow the sequence.
Distinguish clearly between an error in other information and an error in the financial statements, since the report consequences differ.
For comparatives, name whether they are corresponding figures or comparative statements before you discuss the report.

Practice questions from Auditor's reports

Other Information and Comparatives (ISA 720, ISA 710): frequently asked questions

Does the auditor give an opinion on other information under ISA 720?

No. You read it, compare it with the financial statements and your audit knowledge, and report the result. The Other Information section states that the opinion does not cover it.

What should the auditor do if management refuses to correct a material misstatement in other information?

Communicate with those charged with governance and ask for correction. If it is still uncorrected and the other information was obtained before the report date, you must describe the misstatement in the Other Information section. You also consider the effect on your opinion, seeking legal advice, or withdrawing where permitted.

What is the difference between corresponding figures and comparative financial statements?

Corresponding figures are prior-period amounts included as part of the current statements, and your opinion covers the current period only. Comparative financial statements are full prior-period statements, and your opinion covers each period presented.

Is the Other Information section always required in the auditor's report?

For listed entities, yes. The section is always included, whether you have obtained the other information by the report date or expect to obtain it afterwards. For other entities, it is included when you have obtained other information by the report date. Where law or regulation requires it, you include it regardless.