Auditing and Ethics · Audit Report

Other Information, Comparatives and Going Concern in Audit Reports

Updated 5 October 2026

Under SA 720 you read other information in the annual report and report any uncorrected material misstatement in it. Under SA 710 you report on comparatives as part of the financial statements, or as corresponding figures. Under SA 570 you report material uncertainty or an inappropriate going concern basis.

Understand Other Information, Comparatives and Going Concern in Reports

Your opinion covers the financial statements. But the annual report holds more: the directors' report, chairman's statement, management discussion and similar documents. This is other information (SA 720 Revised). You do not give an opinion on it. You must read it and see whether it is materially inconsistent with the financial statements or with what you learned in the audit.

If you find a material misstatement of the other information, ask management to correct it. If management refuses, you communicate the matter with those charged with governance and request correction. If the misstatement is still uncorrected, you consider the implications for your report and describe the uncorrected misstatement in the Other Information section of your report. Withdrawal from the engagement is considered only where law or regulation permits it. It is not a normal step. In this case, where the other information was obtained before the report date, bringing the matter to the attention of users is not a step. That action applies only to other information obtained after the report date.

If you get the other information after the report date, you still perform the SA 720 procedures and request correction of any material misstatement. If management agrees to correct it, you perform the procedures the circumstances need, and you may have to consider the effect on your report. Do not assume the report is never affected. If the misstatement stays uncorrected, you take appropriate action, considering your legal rights and obligations, including bringing the matter to the attention of users of the report. This action applies only here, because the report has already been issued.

The report has a separate section, "Other Information". It is included when you have obtained, or expect to obtain, other information before the date of your report. For listed entities, this is the usual case. It is not an unconditional rule: the section depends on the other information being obtained or expected. The section says what the other information is, that your opinion does not cover it, and your responsibility. It then gives the result: either nothing to report, or a description of the uncorrected misstatement.

Comparative information (SA 710) is prior-period amounts and disclosures in the current statements. There are two models. In corresponding figures, the prior-period amounts are part of the current-period statements and are read only with current-period amounts. Your opinion refers to the current period only. For corresponding figures, your opinion does not refer to the corresponding figures except in the specified circumstances in SA 710, such as an unresolved prior-period modification or a prior-period material misstatement. In comparative financial statements, the prior period is presented as full statements and your opinion refers to each period presented. In India, prior-year figures are usually presented alongside current-year figures, and the auditor's opinion is on the current-period financial statements. That is the corresponding figures approach. Treat this as the usual practice, not a fixed rule, and always check the facts given in the question.

You check that comparatives agree with the prior-period amounts, that accounting policies are consistent, and that any changes are properly adjusted and disclosed. A material misstatement in the prior period that was not fixed, or an unresolved modification, may affect your current report.

For going concern (SA 570 Revised), management assesses the basis, and you conclude on its appropriateness. If the basis is appropriate but a material uncertainty exists and is adequately disclosed, you give an unmodified opinion with a separate section "Material Uncertainty Related to Going Concern". If disclosure is inadequate, you give a qualified or an adverse opinion. The choice depends on the effect of the inadequate disclosure. If it is material but not pervasive, give a qualified opinion. If it is material and pervasive, give an adverse opinion. If the basis is inappropriate, you give an adverse opinion. If management is unwilling to make or extend its assessment, you request it to do so. If it still will not, you consider the implications for your report, which may mean a qualified opinion or a disclaimer of opinion because of the scope limitation.

Key rules to remember

Scope of SA 720: Other information = information in the annual report, other than the financial statements and the auditor's report; You read and consider it. You give no opinion or assurance on it.
Uncorrected misstatement in other information: Material misstatement + management refuses to correct → communicate with those charged with governance and request correction → if still uncorrected, consider the implications for the report and describe the uncorrected misstatement in the Other Information section; Communication with those charged with governance is mandatory, not optional. Withdrawal is considered only where law or regulation permits it, and is not a normal step. This applies to other information obtained before the report date. Bringing the matter to the attention of users is not a step in this case. That action applies only to other information obtained after the report date. In that later case, you still perform the SA 720 procedures and request correction. If management corrects it, perform the necessary procedures and consider the effect on your report. If the misstatement stays uncorrected, take appropriate action considering your legal rights and obligations, including bringing the matter to the attention of users.
Other Information section: Other information obtained, or expected to be obtained, before the report date → Other Information section included (the usual case for listed entities). No other information obtained or expected → no section; The section states either that there is nothing to report, or describes the uncorrected misstatement.
Corresponding figures (SA 710): Opinion refers to the current period only; The prior period is part of the current statements. Your opinion does not refer to the corresponding figures except in the cases SA 710 specifies, e.g. an unresolved prior-period modification or a prior-period material misstatement.
Comparative financial statements (SA 710): Opinion refers to each period presented; Prior-period statements are full statements, and you may have to refer to them in your report.
Going concern, adequate disclosure: Appropriate basis + material uncertainty + adequate disclosure → unmodified opinion + 'Material Uncertainty Related to Going Concern' section; The section refers to the note in the financial statements that describes the uncertainty.
Going concern, inadequate disclosure: Material uncertainty + inadequate disclosure → qualified opinion if the effect is material but not pervasive; adverse opinion if the effect is material and pervasive; Pervasiveness decides the choice. Give the basis for modification in the report.
Going concern, inappropriate basis: Going concern basis used but inappropriate → adverse opinion; This applies even if management gives disclosures.
Going concern, management unwilling to assess: Management unwilling to make or extend its assessment → consider implications for report → qualified opinion or disclaimer of opinion (scope limitation); First request management to make or extend the assessment.

How to solve Other Information, Comparatives and Going Concern in Reports questions

Use this method for any question on other information, comparatives or going concern in the report.

1Identify which standard the facts test: SA 720 (annual report content), SA 710 (prior-period figures) or SA 570 (going concern).
2State the rule in one line in plain words, before applying it.
3Pick out the key facts: is the item material, is management willing to correct, was disclosure adequate, which comparative model is used.
4Apply the rule to the facts and reach a conclusion on the effect on the report.
5Name the paragraph or opinion type: Other Information section, unmodified, qualified, adverse, disclaimer, or Material Uncertainty section.
6Add the supporting action: communicate with those charged with governance, obtain representations, or document.
7Close with a one-line conclusion in the form the question wants.

Quickest way: Three-line scan for MCQs and written answers

When to use it: Use it when time is short, in the MCQ section and for short written answers.

For MCQs, first look for the trap word: 'opinion on other information' is wrong, because you give none.
For comparatives, ask: is the prior period part of the current statements? Yes means corresponding figures and a current-period opinion.
For going concern, ask two questions: is the basis appropriate, and is disclosure adequate? Then pick unmodified with a Material Uncertainty section, qualified or adverse. If disclosure is inadequate, material but not pervasive means qualified, and material and pervasive means adverse.
In written answers, use the format: provision, facts, conclusion. Write the standard, the rule, apply it, then state the effect on the report. Each part earns step marks.

Common mistakes in Other Information, Comparatives and Going Concern in Reports

Saying the auditor gives an opinion on other information.
Students link all content of the annual report to the audit opinion.
Fix: Remember the opinion covers only the financial statements. For other information, you read, consider and report.
Treating other information as covering the financial statements themselves.
The word 'information' sounds broad.
Fix: Other information is information in the annual report other than the financial statements and your report.
Mixing up corresponding figures and comparative financial statements.
Both deal with prior-period data.
Fix: Ask whether the prior period is a full set of statements with its own opinion. If it is only part of the current presentation, it is corresponding figures.
Qualifying the opinion whenever a material uncertainty exists.
Students assume any going concern doubt is bad news for the opinion.
Fix: If the basis is appropriate and disclosure is adequate, the opinion is unmodified. Add the Material Uncertainty section.
Using an Emphasis of Matter paragraph for a going concern uncertainty.
Both draw attention to a disclosure.
Fix: A material uncertainty on going concern needs its own separate section, not an Emphasis of Matter paragraph.
Ignoring other information received after the report date, or applying the after-report-date action to other information obtained before it.
Students think work ends once the report is signed, or they mix up the pre-report and post-report steps.
Fix: Still perform the SA 720 procedures and request correction if there is a material misstatement. If management agrees to correct it, perform the necessary procedures and consider the effect on your report. Do not assume the report is never affected. If the misstatement remains uncorrected, take appropriate action, considering your legal rights and obligations, to bring the matter to the attention of users of the report. This step applies only to other information obtained after the report date. For other information obtained before the report date, you communicate with those charged with governance and consider the implications for your report.

Worked examples

Example 1

While reading the directors' report of a listed company, you find a statement that contradicts a note to the financial statements. The inconsistency is material. Management refuses to correct it. What should you do?

Show the solution

The directors' report is other information under SA 720, because it is in the annual report and is not the financial statements or your report.
You have found a material inconsistency, which is a material misstatement of the other information.
Ask management to correct it. Management has refused.
You communicate the matter with those charged with governance and request correction.
If it is still uncorrected, you consider the implications for your report and describe the uncorrected misstatement in the Other Information section.
Withdrawal from the engagement is not a routine step. Consider it only where law or regulation permits it.

Answer: Communicate the matter with those charged with governance and request correction. If it remains uncorrected, consider the implications for the auditor's report and describe the uncorrected material misstatement in the Other Information section. Withdrawal is considered only where law or regulation permits it. The opinion on the financial statements itself is not modified because of the other information.

Example 2

A company's financial statements are prepared on a going concern basis. Loan repayments are overdue and a material uncertainty exists. Note 30 fully discloses this and management's plans. What is the effect on the audit report?

Show the solution

Check the basis: management has used the going concern basis, and the facts show it is still appropriate.
Check the uncertainty: a material uncertainty exists that may cast significant doubt on the company's ability to continue.
Check disclosure: Note 30 gives adequate disclosure.
Under SA 570, with an appropriate basis and adequate disclosure, the opinion is unmodified.
Add a separate section titled 'Material Uncertainty Related to Going Concern'. It draws attention to Note 30 and states that the opinion is not modified in respect of this matter.

Answer: Give an unmodified opinion and add a separate 'Material Uncertainty Related to Going Concern' section referring to Note 30. An Emphasis of Matter paragraph is not the correct place for this.

Exam tips

Start the answer by naming the standard (SA 720, 710 or 570). It signals the right provision and earns marks.
For going concern, keep a three-outcome grid in mind: unmodified with a Material Uncertainty section, qualified or adverse for inadequate disclosure (qualified if material but not pervasive, adverse if material and pervasive), and adverse for an inappropriate basis. If management will not make or extend its assessment, think qualified or disclaimer.
In MCQs, watch for the phrase 'opinion on other information'. That option is wrong.
In case studies, write provision, facts and conclusion in that order. Use the facts given, such as materiality and management's response.

Practice questions from Audit Report

Other Information, Comparatives and Going Concern in Reports: frequently asked questions

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

No. You read the other information and consider whether it is materially inconsistent with the financial statements or with your audit knowledge. You report the result in the Other Information section but give no opinion or assurance on it.

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

With corresponding figures, the prior-period amounts are part of the current-period statements and your opinion covers only the current period. You refer to them only in cases SA 710 specifies, such as an unresolved prior-period modification. With comparative financial statements, the prior period is presented as full statements and your opinion refers to each period presented.

When does a going concern issue lead to a modified opinion?

A modified opinion arises when disclosure of a material uncertainty is inadequate or when the going concern basis is inappropriate (adverse). For inadequate disclosure, the opinion is qualified if the effect is material but not pervasive, and adverse if it is material and pervasive. It can also arise if management is unwilling to make or extend its assessment, which may lead to a qualified opinion or disclaimer because of the scope limitation. If the basis is appropriate and disclosure is adequate, the opinion is unmodified with a separate Material Uncertainty section.

Is a Material Uncertainty Related to Going Concern section the same as Emphasis of Matter?

No. It is a separate section used specifically for a going concern material uncertainty. Emphasis of Matter paragraphs are used for other matters already disclosed that are fundamental to users' understanding.