Advanced Audit and Assurance (International) · Completion and final review

Other Information and Auditor's Responsibilities (ISA 720) for ACCA AAA

Updated 11 October 2026

Other information is financial or non-financial information, apart from the financial statements and auditor's report, in a document such as the annual report. Under ISA 720 (Revised) you read it, compare it with the financial statements and your audit knowledge, and respond if you find a material inconsistency or misstatement. You do not give an opinion on it.

Understand Other Information and Auditor's Responsibilities (ISA 720)

Listed companies and many others publish financial statements inside a larger document, usually the annual report. That report holds the directors' report, strategy review, chair's statement, key performance indicators and more. These items are other information. Readers see them alongside the audited numbers, so errors in them can mislead and damage trust in the audited statements.

ISA 720 (Revised) sets out your duty. Your opinion on the financial statements does not cover other information. You are not required to obtain assurance on it. But you must read it and consider whether it is materially inconsistent with the financial statements, or with what you learned during the audit. You must also stay alert to any other material misstatement of fact.

A material inconsistency arises when other information contradicts the audited financial statements or your audit knowledge. Example: the strategic report says profit rose 10% but the statements show a fall. A material misstatement of the other information exists when it is incorrectly stated or misleading, and it is not an inconsistency with the audit. You judge materiality using the same thinking as for the financial statements, and you consider both amount and nature.

Timing matters. You should ask management, early on, which documents will make up the annual report and when they will be available. Aim to obtain the final version before the date of your auditor's report. If part will only be issued afterwards, agree with management that you will get it, and take action then.

Under ISA 720 (Revised) and ISA 700 (Revised), an Other Information section is required in the auditor's report for audits of listed entities. For other audits it is required when you have obtained, or expect to obtain by the report date, other information. If no other information exists, the section is omitted. Where the section is included, it says what the other information is, that your opinion does not cover it, your responsibility to read it, and either that you have nothing to report or a description of the uncorrected material misstatement. This differs from ISA 700, where the report states an opinion on the financial statements and gives the basis for it.

Key rules to remember

Definition of other information: Other information = financial or non-financial information in an annual report, excluding the financial statements and the auditor's report; The annual report is the usual document. Your audit opinion does not cover it.
Core duty: Read → consider consistency with the financial statements → consider consistency with audit knowledge → stay alert to other misstatement; This is a reading and responding duty, not an assurance duty.
Response to a suspected material misstatement: Discuss with management → request management to consult a qualified third party (for example a legal adviser) → evaluate the response → if still materially misstated, request management to correct it → if not corrected, communicate with those charged with governance and request correction → consider the implications for the auditor's report; Do not simply accept the first explanation. Obtain evidence.
Uncorrected material misstatement before the report date: Still uncorrected after communicating with those charged with governance → consider the implications for your opinion and the engagement → describe it in the Other Information section or, where law or regulation permits, withdraw from the engagement; Describing it and withdrawing are the two responses. Withdrawal is available only where law or regulation permits it. If you discover the misstatement after the report date, consider the implications for the auditor's report, take appropriate action, and seek legal advice.
Misstatement in the financial statements instead: If the financial statements need amending and management refuses → consider a modified opinion under ISA 705; The issue then sits in the opinion, not the Other Information section.

How to solve Other Information and Auditor's Responsibilities (ISA 720) questions

Use this order for any ISA 720 scenario or requirement. It keeps you on the question and earns the application marks.

1Identify what is other information in the scenario and what is audited. Name the documents, for example the strategic report, KPIs or chair's statement.
2State the auditor's duty: read it, consider consistency with the financial statements and with audit knowledge, and stay alert to misstatement. Note that no opinion is given.
3Identify the issue: an inconsistency or a misstatement. Compare the figures or claims with the audited numbers and your audit evidence, and say which one is wrong.
4Judge materiality by amount and by nature, and say whether it could influence users.
5Recommend action: discuss with management, ask for correction, obtain evidence, then escalate to those charged with governance if unresolved.
6Decide which statement needs correction. If the financial statements are wrong, consider ISA 705. If only the other information is wrong and left uncorrected, report it in the Other Information section.
7Consider timing and wider impact: whether the document is final, effects on your reporting, integrity and risk concerns, and whether legal advice is needed.
8Link to the scenario with specific numbers and facts. Show scepticism and a clear recommendation.

Quickest way: Read, compare, escalate, report

When to use it: Use this when a short requirement asks what the auditor should do about a doubtful statement in the annual report.

Say it is other information and not covered by the audit opinion.
Name the clash: with the financial statements, with audit knowledge, or just wrong.
Say whether it is material.
Discuss with management and ask for correction.
If it is still uncorrected before the report date, tell those charged with governance and consider the implications for the opinion. Then describe it in the Other Information section or, where law or regulation permits, withdraw.
If you find it only after the report date, consider the implications for the auditor's report, take appropriate action and seek legal advice.
If the financial statements are wrong instead, consider a modified opinion.

Common mistakes in Other Information and Auditor's Responsibilities (ISA 720)

Saying the auditor gives an opinion on other information.
Students link anything in the annual report with the audit opinion.
Fix: State clearly that the opinion does not cover other information. Your duty is to read and respond.
Treating other information as only financial figures.
The word information makes students think of numbers.
Fix: Include non-financial narrative, such as strategy, risk statements and KPIs, whenever they sit in the annual report.
Confusing a material inconsistency with a misstatement of fact.
Both lead to a conversation with management, so they look alike.
Fix: An inconsistency is a clash with the financial statements or audit knowledge. A misstatement is wrong or misleading on its own. Name which one applies.
Jumping to a modified opinion when other information is wrong.
Students link any problem with an opinion change.
Fix: Modify the opinion only if the financial statements are misstated and management will not correct them. A wrong narrative goes in the Other Information section.
Ignoring timing of the annual report.
Students focus only on the content and forget the process.
Fix: Mention agreeing in advance when you will obtain the document and acting after the report date if parts are issued later.
Giving a generic answer with no figures from the scenario.
Students memorise the steps but do not apply them.
Fix: Quote the numbers, compare them with the audited statements and state a conclusion on materiality.

Worked examples

Example 1

You are auditing Zenith Co, a listed company with a $50 million profit before tax in the audited financial statements. The draft strategic report says: 'Profit before tax rose by 18% to $62 million.' You have audit evidence supporting $50 million. Explain what you should do.

Show the solution

This is other information. It sits in the strategic report, so your opinion does not cover it, but you must read it and respond.
Compare it with the audited statements: $62 million against $50 million is a $12 million difference. The figure contradicts the audited number, so it is a material inconsistency.
It is material by amount, since the claimed profit is 24% above the audited figure ($12 million ÷ $50 million), and by nature, since profit is a key measure for users. The $62 million is wrong whatever the growth rate. The 18% claim must be rechecked against the audited prior-year profit. An 18% rise to $62 million implies prior-year profit of about $52.5 million ($62 million ÷ 1.18). If the audited prior-year profit differs from that, the 18% is wrong too. If it were about $42.4 million, 18% growth to the audited $50 million would be correct.
Discuss with management and ask them to correct the report. Ask which figure is right and obtain evidence.
If the strategic report is corrected, obtain and re-read the revised other information to confirm the correction has been made properly. Then no further action is needed. If management refuses, report to those charged with governance and ask them to correct it.
Check whether the financial statements are in error. If $50 million is wrong and management will not change it, consider a modified opinion under ISA 705.
If the financial statements are right and the other information stays uncorrected before the report date, consider the implications for your opinion and the engagement. Then describe the misstatement in the Other Information section or, where law or regulation permits, withdraw. If you find the misstatement only after the report date, consider the implications for the auditor's report, take appropriate action and seek legal advice.

Answer: Treat it as a material inconsistency and press management to correct the $62 million. Recheck the 18% growth claim against the audited prior-year profit, since it may or may not be wrong. Once corrected, re-read the revised other information to confirm the fix. If management refuses, escalate to those charged with governance. If it stays uncorrected before the report date, describe it in the Other Information section or, where permitted, withdraw. If found after the report date, consider the implications for the report and seek legal advice. Modify the opinion only if the financial statements themselves are wrong.

Example 2

Distinguish the auditor's responsibilities for other information under ISA 720 (Revised) from those for the financial statements under ISA 700 (Revised).

Show the solution

Start with the opinion. Under ISA 700 you form and express an opinion on whether the financial statements give a true and fair view or are presented fairly. Under ISA 720 you give no opinion.
Next, cover the work. For the financial statements you gather sufficient appropriate audit evidence. For other information you read it and compare it with the financial statements and audit knowledge. You do not audit it.
Then the response. A misstatement in the financial statements can lead to a modified opinion under ISA 705. A misstatement in other information that stays uncorrected before the report date leads to a description in the Other Information section or, where law or regulation permits, withdrawal.
Cover reporting. The ISA 700 report has an Opinion and Basis for Opinion section. The ISA 720 section says what the other information is and that the opinion does not cover it, and either reports nothing or describes the misstatement.
Finish with timing. Aim to obtain the final other information before the report date, and take action later if it arrives afterwards.

Answer: ISA 700 requires an opinion supported by audit evidence, and errors lead to a modified opinion. ISA 720 requires reading and responding without an opinion, and errors uncorrected before the report date are described in the Other Information section or, where permitted, lead to withdrawal.

Exam tips

Always say the audit opinion does not cover other information. It is a quick mark and it shows you understand the standard.
Use scenario numbers. Compare the other information with the audited figure and state the difference.
Separate where the error sits: in the financial statements it points to ISA 705, in other information it points to the Other Information section.
Show professional skills by recommending a sequence: discuss, request correction, escalate, report. Add scepticism on management's explanation.
Check timing in the scenario. Late-issued documents and wording in the auditor's report are easy marks.

Practice questions from Completion and final review

Other Information and Auditor's Responsibilities (ISA 720): frequently asked questions

What counts as other information under ISA 720?

It is financial or non-financial information in a document containing the audited financial statements and the auditor's report, other than those two items. Typical examples are the directors' report, strategy review, chair's statement and KPIs. The annual report is the usual source.

What should the auditor do if other information is materially inconsistent?

Discuss it with management and ask for correction or evidence. Decide whether the financial statements or the other information is wrong. If the financial statements are wrong and uncorrected, consider ISA 705. If the other information stays uncorrected before the report date, tell those charged with governance, then describe it in the auditor's report or, where law or regulation permits, withdraw. If you find it after the report date, consider the implications for the report and seek legal advice.

What is the difference between ISA 720 and ISA 700?

ISA 700 covers forming and expressing an opinion on the financial statements and the content of the auditor's report. ISA 720 covers the auditor's duty to read and respond to other information, with no opinion on it. ISA 700 needs audit evidence, while ISA 720 needs reading and comparison.

Does ISA 720 apply to all audits?

ISA 720 (Revised) applies to audits under ISAs. The Other Information section is required for audits of listed entities, and for other audits when the auditor has obtained, or expects to obtain by the report date, other information. If no other information exists, the section is omitted. Always check the scenario facts.