ISSAI 1710The International Standards of Supreme Audit Institutions, ISSAI, are issued by the pdf

ISSAI 1710
The International Standards of Supreme Audit Institutions, ISSAI, are issued by the International
Organization of Supreme Audit Institutions, INTOSAI. For more information visit www.issai.org.
I N T O S A I
Financial Audit Guideline –
Comparative Information –
Corresponding Figures and
Comparative Financial
Statements
This Financial Audit Guideline draws on a not final redrafted version of International Standard on Auditing (ISA) 710, ”Comparative
Information – Corresponding Figures and Comparative Financial Statements” developed by the International Auditing and
Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC). The proposed ISA is
included in this Guideline with the permission of IFAC.

Exposure Draft of INTOSAI
Practice Note, pages 3-4
(ISA 710 enclosed for reference)

For Comments
2 February-1 May 2009

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Date: January 29, 2009
Ref no: 14-2008-0111




Request for comments:
Draft Practice Notes for International
Standards on Auditing (ISA) 600, 610,
700, 705, 706,710 and 720.

The enclosed Practice Notes have been developed by the Special
Expert Teams no 4 and 5 and approved for exposure by the
Financial Audit Guidelines Subcommittee at their meeting in
January, 2009.
With this letter the Practice Notes are exposed for comments from
the entire INTOSAI community. The exposure period expires on
May 01, 2009.
Format of Comments
Commenting on exposure drafts is open to all members of INTOSAI
and other interested stakeholders. All comments will be considered
by the experts and back-office experts involved in development of
the guidance before issuing the final guidance for approval by
Financial Audit Guidelines Subcommittee and thereafter the

Governing Board.
Request for general comments
Comments may be issued as desired, however it is preferable if the
comments are structured to give an answer on the following basic
questions:
Do you agree with the stated applicability for the ISAs in the
public sector environment?
Do you agree with the stated additional guidance given in the
Practice Notes? If not what additional areas/guidance do you
think should be added?
In your opinion, will the drafted guidance together with the
respective ISA provide relevant guidance for the public sector
auditor?
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All comments provided will be exposed on the FAS website as well
as on www.issai.org after the commenting period is closed.

FAS especially encourage and highly appreciate comments
from Courts of Accounts.

Request for specific comments
Practice Note for ISA 600

Paragraphs P3 and P4 is drafted to clarify that if the group
auditor refers to a component auditor in the group auditor’s
report and therefore not take the sole responsibility, the audit is
not in compliance with the ISAs. This is no difference related to
the public sector, and is already contained in the ISA. Do you
consider it relevant to have the responsibility clarified as drafted?
The practice Note has some appendices (Appendix 2-4) providing
additional public sector related examples or matters related to
the appendices of the ISA. Do you have additional suggestions to
be included in the appendices?
PN 600 does not provide additional guidance directed to the
Court of Accounts environment. Representatives from Court of
Accounts system are highly welcome to suggest any such
guidance relevant for the PN 600.
Practice Note for ISA 610

The FAS has considered that the issue of determining the
independence for internal auditors needs to be explained as
included in paragraph P4. Do you agree on the issues to consider
in order to determining the independence and objectivity in the
public sector in addition to those FAS out in ISA 610?
The FAS did not identify a need for any specific Court of
Accounts guidance. Representatives from Court of Accounts
system are especially requested to suggest guidance if needed.

Practice Note for ISA 700
The experts considered ISA 700 applicable for audits of financial
statements in the public sector. The experts considered the
illustrative example reports in the ISA to be relevant to the
public sector as well and decided not to include any additional

examples. Do you agree?
The Practice Note to ISA 700 provides guidance on how to make
reference to auditing standards that are applied in the public
sector (paragraph P12). Do you consider the reference relevant?
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The Practice Note addresses the issue on references to
compliance with ethical requirements in the auditor’s report in
P9. Do you agree with the guidance provided?
INTOSAI Fundamental Principles (paragraph 4.0.20.) deals with
inclusion of recommendations and responses from the audited
entity within the auditor’s report. FAS considered such inclusion
not to be acceptable in the Auditor’s report. Therefore the
guidance in P5 has been drafted. Do you agree with the guidance
provided?
The Practice Note for ISA 700 does not provide additional
guidance directed to the Court of Accounts environment. Experts
representing the Court of Accounts system are highly welcome to
suggest any such guidance relevant for the Practice Note for ISA
700.
Practice Note for ISA 705
The FAS has considered ISA 705 applicable for audits of financial
statements in the public sector as explained in paragraph P2.

The FAS did not consider it necessary to include any additional
examples of modified opinions in addition to the illustrative
examples included in the ISA. The differences in the public sector
would mainly relate to the addressee and the subject for
modification. Do you agree, or would you prefer that examples
were included in the Practice Note?
The FAS did not identify a need for any specific Court of
Accounts guidance. Experts representing the Court of Accounts
system are especially requested to suggest guidance if needed.
Practice Note for ISA 706
The FAS considered ISA 706 applicable for audits of financial
statements in the public sector, and have concentrated on
providing additional guidance relevant to the public sector. P3
provides examples relevant to the public sector on circumstances
when an Emphasis of Matter(s) paragraph may be issued, in
addition to the examples of circumstances in paragraph A1 of the
ISA. If you have examples of other relevant circumstances that
can render an Emphasis of Matter(s) paragraph, please provide
such examples.
The FAS did not identify a need for any specific Court of
Accounts guidance. Experts representing the Court of Accounts
system are especially requested to suggest guidance if needed.
Practice Note for ISA 710
The FAS considered ISA 710 applicable for audits of financial
statements in the public sector both related to comparative
financial statements and corresponding figures. However, the
experts were a bit concerned with not being aware of the extent
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of the existence of comparative financial statements in the public
sector. It would therefore be helpful if you could include in your
response information regarding whether you are auditing
comparative financial statements and if so, if the guidance
provide is relevant.
The FAS did not identify a need for any specific Court of
Accounts guidance. Experts representing the Court of Accounts
system are especially requested to provide and suggest specific
guidance if needed
Practice Note for ISA 720
Paragraph A1 of the ISA addresses other reporting
responsibilities. The FAS considered that there was no additional
need for guidance in this respect. Do you agree?
The FAS did not identify a need for any specific Court of
Accounts guidance. Experts representing the Court of Accounts
system are especially requested to provide and suggest specific
guidance if needed



Thank you very much for taking the time to consider these Practice
Notes.

Jonas Hällström
FAS Director


Please send your comments by January, 31 2009 to:

or by mail to:
Riksrevisionen
The FAS Project Secretariat
114 90 Stockholm
Sweden
or by fax to: +46-8-5171 4111



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Table of Contents
BACKGROUND 3
SCOPE OF THE ISA 3
CONTENT OF THE PRACTICE NOTE 3
APPLICABILITY OF THE ISA IN PUBLIC SECTOR AUDITING 4
ADDITIONAL GUIDANCE ON PUBLIC SECTOR ISSUES 4
SCOPE OF THIS ISA 4
AUDIT REPORTING 4

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ISSAI 1710
Practice Note
1
to [Redrafted] International
Standard on Auditing 710 – Comparative
Information – Corresponding Figures and
Comparative Financial Statements
Background
This Practice Note provides supplementary guidance on [Redrafted] International
Standard on Auditing (ISA) 710 – Comparative Information – Corresponding
Figures and Comparative Financial Statements. It is read together with the ISA.
The Practice Note is effective the same date as the ISA.
Scope of the ISA
ISA 710 deals with the auditor’s responsibilities regarding comparative information
in an audit of financial statements. When the financial statements of the prior period
have been audited by a predecessor auditor or were not audited, the requirements
and guidance in ISA 510 (Redrafted)
2
regarding opening balances also apply.
The Nature of Comparative Information
The nature of the comparative information that is presented in an entity’s financial
statements depends on the requirements of the applicable financial reporting
framework. There are two different broad approaches to the auditor’s reporting
responsibilities in respect of such comparative information: corresponding figures
and comparative financial statements. The approach to be adopted is often specified

by law or regulation but may also be specified in the terms of engagement.
The essential audit reporting differences between the approaches are:
(a) For corresponding figures, the auditor’s opinion on the financial statements
refers to the current period only; whereas
(b) For comparative financial statements, the auditor’s opinion refers to each period
for which financial statements are presented.
ISA 710 addresses separately the auditor’s reporting requirements for each
approach.
ISA 710 is effective for audits of financial statements for periods beginning on or
after December 15, 2009.
Content of the Practice Note
P1. The Practice Note provides additional guidance for public sector auditors
related to:


1
All Practice Notes are considered together with General Considerations in the Financial Audit
Guidelines.
2
ISA 510 (Redrafted), “Initial Audit Engagements – Opening Balances.”
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a. Scope of this ISA
b. Audit Reporting
Applicability of the ISA in Public Sector Auditing
P2. ISA 710 (Redrafted) is applicable to auditors of public sector entities in their
role as auditors of the financial statements.

Additional Guidance on Public Sector Issues
Scope of this ISA
P3. As noted in paragraph 2 of ISA 710 (Redrafted) the approach to be adopted
in regard to reporting responsibilities in respect of comparative information is
often specified by law or regulation. Public sector auditors therefore need to
consider the audit mandate in addition to any terms of the engagement.
Audit Reporting
P4. Normally the situations described in paragraphs 13 and 17 of ISA 710
(Redrafted) are less likely to occur in the public sector as the responsibility
to audit the financial statements may reside with the Supreme Audit
Institution (SAI) as defined in its mandate. Situations where the concept of
predecessor auditor may be relevant are nationalization and privatization.
When public sector auditors’ contract out the audit of the financial statements
and the responsibility of the audit remains within the SAI, the concept of
predecessor auditor will not be relevant.
P5. If the prior period financial statements are amended as stated in paragraph 18
of ISA 710 (Redrafted) it may be common practice in some public sector
environments to include an Emphasis of Matter, if the matter is presented or
disclosed in the financial statements, or Other Matter Paragraph. Such
practice would not contradict compliance with the ISAs.

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AGENDA ITEM 6-C (UPDATED)
1

INTERNATIONAL STANDARD ON AUDITING 710
(REDRAFTED)

COMPARATIVE INFORMATION—
CORRESPONDING FIGURES AND COMPARATIVE FINANCIAL STATEMENTS
(Effective for audits of financial statements for periods beginning on or after December 15, 2009)
CONTENTS
Paragraphs
Introduction
Scope of this ISA 1-3
Effective Date 4
Objectives 5
Definitions 6
Requirements
Audit Procedures 7-9
Audit Reporting 10-19
Application and Other Explanatory Material
Audit Procedures A1
Audit Reporting A2-A118
Appendix 1: Example Auditor’s Reports
Appendix 2: Reporting Decision Trees


1
[Agenda Item 6-C was updated during the September 15-19, 2008 IAASB meeting to reflect in marked text
changes based on decisions taken at the meeting. The updated agenda item is included here for information
purposes only and is not the final pronouncement. Interested parties are discouraged from distributing,
translating or using the updated agenda item for any purpose. They should await the release of the final
pronouncement, which may contain minor modifications when compared to the updated agenda item. The final
pronouncement is that approved by the IAASB and published by IFAC after the Public Interest Oversight Board
(PIOB) has confirmed that due process was followed in its development. It will be available at

References in this ISA to other ISAs that have not yet been finalized reflect the working titles of those ISAs.

The references are indicated in brackets and will be updated when those ISAs are finalized.]
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INTERNATIONAL STANDARD ON AUDITING 710 (REDRAFTED)

2
International Standard on Auditing (ISA) 710 (Redrafted), ―Comparative Information—
Corresponding Figures and Comparative Financial Statements‖ should be read in conjunction
with ISA 200 (Revised and Redrafted), ―Overall Objectives of the Independent Auditor and the
Conduct of an Audit in Accordance with International Standards on Auditing.‖


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