Appendix No. 15
to the Order of the Ministry of Finance of the Russian Federation of November 9, 2016 No. 207n
The International Standard of Audit (ISA) 720 (reviewed) "The auditor's obligations relating to other information" should be considered together with MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".
1. In this International Standard of Audit (ISA) the auditor's obligations concerning other information, both financial, and non-financial (other than the financial reporting and audit opinion about this reporting), the organization included in the annual statement are established. The annual statement of the organization can represent one document or set of several documents intended for the same purpose.
2. This standard is developed in the context of financial records audit which is carried out by the independent auditor. Therefore, the auditor's purposes described in this standard shall be considered in the context of the main objectives of the auditor described in Item 11 MCA 200 <1> of the Requirement of this MSA are developed to help the auditor with goal achievement, specified in International standards of audit and consequently, main objectives of the auditor. The auditor opinion on the financial reporting does not extend to other information, and this standard does not demand from the auditor of receipt of auditor proofs in addition to the proofs necessary for forming of opinion on the financial reporting.
<1> MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".
3. This standard obliges the auditor to study other information and to consider it as other information which substantially does not correspond to the data containing in the financial reporting or to knowledge gained by the auditor during audit can specify that essential misstatement of the financial reporting or essential misstatement of other information takes place and any of these misstatements can undermine confidence to the financial reporting and to audit opinion about this reporting. Such essential misstatements can influence in also inadequate way the economic decisions made by users for whom the audit opinion is prepared.
4. This standard can help the auditor with observance of the relevant ethical requirements <1> according to which the auditor shall avoid situations when it is obviously associated with information which as the auditor believes, contains the false or misleading statement, carelessly prepared statements in essential degree or in which data which need to be included if such omissions or ambiguous formulations can mislead are passed or ambiguously stated also.
<1> The code of ethics of professional accountants of Council for international standards of ethics for accountants (the Code of SMSEB), Item 110.2.
5. Other information can include the numerical indicators or other elements representing analog, generalization or disaggregation of numerical indicators or other financial statement elements, either other numerical indicators or other elements, information on which the auditor obtained during audit. Other information can also include other data.
6. The auditor's obligations concerning other information (other than applicable obligations on creation of the conclusion) are carried out irrespective of whether other information by the auditor to or after date of audit opinion is obtained.
7. This standard is not applied in the relation:
(a) preliminary announcement of financial information or
(b) documents on placement of securities, including prospectuses of the issue.
8. The auditor's obligations according to this standard do not represent the task providing confidence concerning other information and do not impose on the auditor of obligations on receipt of confidence in the relation of other information.
9. The laws or regulations can impose the subsidiary duties concerning other information which are going beyond scope of this standard on the auditor.
11. The purpose of the auditor consists in that as a result of acquaintance with other information:
(a) consider question of whether essential discrepancy between other information and the financial reporting takes place;
(b) consider question of whether essential discrepancy between other information and knowledge gained by the auditor in the course of audit takes place;
(c) carry out proper procedures if the auditor will reveal that such essential discrepancies probably take place or when he any otherwise knows that other information is probably significantly distorted;
(d) provide the conclusion according to this standard.
12. For the purposes of International standards of audit the following terms have the stated below values:
(a) the annual statement - the document or set of the documents prepared, as a rule, on annual basis by the management or persons who are responsible for corporate management according to the laws, regulations or established practices with the purpose to provide to owners (or to similar interested persons) information on organization activity, its financial results and financial position reflected in the financial reporting. The annual statement includes the financial reporting and audit opinion about this reporting or is attached to them and usually contains information on changes in the organization, on its future prospects, risks and factors of uncertainty, the statement of governing body of the organization and reports on questions of corporate management (see the Items A1 - A 5);
(b) misstatement of other information - misstatement of other information exists if other information is incorrectly stated or otherwise misleads (including because of the omission or ambiguous statement of information necessary for the correct understanding of any question opened in other information) (see the Items A6 - A 7);
(c) other information - the financial or non-financial information (other than the financial reporting and audit opinion about this reporting) included in the annual statement of the organization (see the Items A8 - A 10).
13. The auditor shall (see the Items A11 - A 22):
(a) determine by discussion with management what document or set of documents are part of the annual statement, and also method and terms of release of such document or such documents planned by the organization;
(b) agree with management on issue of that the auditor timely and if it is possible, before date of audit opinion received final version of the document or the documents which are part of the annual statement;
(c) if some or all documents determined in Item (a) cannot be received before date of audit opinion, request from management the written application, confirmatory that the final version of the document or documents will be provided to the auditor when it is ready, but before its release by the organization that the auditor could finish procedures according to requirements of this standard (see Item A 22).
14. The auditor shall study other information and at the same time (see the Items A23 - A 24):
(a) consider question of whether essential discrepancy between other information and the financial reporting takes place. As basis for this purpose the auditor shall compare (to estimate their compliance) the chosen numerical indicators or other elements as a part of other information (the representing analog, generalization or disaggregation of numerical indicators or other financial statement elements) to such numerical indicators and other financial statement elements (see the Items A25 - A 29);
(b) consider question of whether essential discrepancy between other information and knowledge gained by the auditor during audit in the context of the obtained auditor evidence and the conclusions drawn during audit (see the Items A30 - A 36) takes place.
15. In case of acquaintance with other information according to Item 14 the auditor shall keep special attention to signs of the fact that the other information which is not relating to the financial reporting or to knowledge gained by the auditor during audit, perhaps is significantly distorted (see Items A 24, by A37 - A 38).
16. If the auditor revealed possible essential discrepancy (or he knew that other information, perhaps, is significantly distorted), he shall discuss this question with management and if necessary carry out other procedures to determine (see the Items A39 - A 43):
(a) whether essential misstatement of other information takes place;
(b) whether essential misstatement of the financial reporting takes place or
(c) whether the auditor needs to carry out studying of the organization and its environment again.
17. If the auditor comes to conclusion that essential misstatement of other information takes place, it shall indicate to management the need corrections of other information. If management:
(a) agrees to make correction, the auditor shall determine that correction was made;
(b) refuses to make correction, the auditor shall bring this question to the attention of the faces which are responsible for corporate management and to demand that correction was made.
18. If the auditor comes to conclusion about availability of essential misstatement in the other information obtained before date of audit opinion, and other information is not corrected after informing persons who are responsible for corporate management, the auditor shall take proper measures, including (see Item A 44):
(a) consider consequences for audit opinion and inform persons who are responsible for corporate management on how the auditor plans to specify in audit opinion availability of essential misstatement (see Item 22(e) (ii) or Item A 45);
(b) refuse task if it is possible according to the applicable laws or regulations (see the Items A46 - A 47).
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