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

Audit of Halden Group is complete and the auditor's report is dated 12 March. The annual report, including the chairman's statement, is expected to be finalised in April. The auditor has not yet obtained the chairman's statement. Which approach complies with ISA 720 (Revised)?

The auditor should try to obtain the final other information before signing. If part is only available later, the report should reflect that position, the auditor must read it once obtained, and if a material misstatement is found must act, including communicating with those charged with governance.

  1. AIssue the report on 12 March and read the chairman's statement only if the directors request it
  2. BIssue the report with an Other Information section stating that the auditor has nothing to report, without having read the statement
  3. CArrange with management to receive the final other information before the report date, or, if not possible, report on the basis of what is available and take action after the report date if a misstatement is later foundCorrect
  4. DRefuse to sign the report until the whole annual report is printed and distributed

Explanation

ISA 720 (Revised) requires the auditor to arrange to obtain the final version of the other information before the date of the auditor's report where possible. If some is only available afterwards, the auditor must read it when obtained and, if a material misstatement exists, take appropriate action, including communicating with those charged with governance. Stating nothing to report without reading would be unsupported.

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