Which of the following statements is TRUE regarding the auditor's responsibility for 'Other Information' included in an annual report containing audited financial statements (e.g., the President's Letter)?

Answer options:

The auditor must audit the other information and express an opinion on it.

The auditor has no responsibility for other information.

The auditor should read the other information to identify material inconsistencies with the audited financial statements.

The auditor must perform analytical procedures on the other information.

How to approach this question

Recall AU-C 720. Keyword: READ. Purpose: Consistency check.

Full Answer

C.The auditor should read the other information to identify material inconsistencies with the audited financial statements.✓ Correct

The auditor should read the other information to identify material inconsistencies with the audited financial statements.

The auditor's responsibility for other information (OI) is to read it and consider whether a material inconsistency exists between the OI and the financial statements. If there is an inconsistency, the auditor must determine if the financials or the OI needs revision.

Common mistakes

Thinking the auditor audits or ignores the other info.

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