ICAI Implementation Guide on Standard on Auditing (SA) 720 (Revised)

ICAI Implementation Guide on Standard on Auditing (SA) 720 (Revised) with FAQs

Standard on Auditing (SA) 720 (Revised), “the Auditor’s Responsibilities Relating to Other Information” was issued by the ICAI in 2018.

The SA 720 was made applicable for audits of financial statements for financial year 2018-19 and onwards. The revised SA 720 (Revised) has made significant changes to pre-revised SA 720 by incorporating several new requirements including reporting requirements on “Other Information”.

The Auditing and Assurance Standards Board (AASB) of ICAI has issued an Implementation Guide on SA 720 (Revised) to provide required guidance to chartered accountants in discharging their responsibilities effectively.

The Implementation Guide contains three chapters and one Appendix as under:

Chapter 1 Introduction
Chapter 2 Importance of Reporting on Other
 information
Chapter 3 33 Frequently Asked Questions (“FAQs”) and Responses
Appendix Illustrations of Auditor’s Reports relating to Other Information given in Appendix 2 of SA 720(Revised)

In the revises SA 720, the ‘Other information’ include documents that are provided to stakeholders along with the financial statements, and which meet the definition of an “annual report”. An entity’s annual report may be a single document or a combination of documents that serve the same purpose (e.g. Management Report, Chairman’s Statement, Corporate Governance Statement/ Report, etc.).

The revised SA 720 provides that the auditor’s report shall include a separate section with a heading “Other Information” or other appropriate heading such as ‘information other than the financial statements and auditor’s report thereon’ in all cases i.e. irrespective of auditor has something/nothing to report on other information.

The new reporting standard SA 720(Revised) is applicable for audits of financial statements for periods beginning on or after April 1, 2018.

However, the reporting requirements under Revised SA 720 are not applicable to unlisted non corporate entities.

Download ICAI Implementation Guide on Standard on Auditing (SA) 720 (Revised) Click Here >>

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