Which of the following statements is correct regarding the auditor's responsibility for 'other information' included in the annual report containing audited financial statements?

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

AU-C 720: Read and consider. Don't audit.

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 is required to read the 'other information' (like the MD&A or President's Letter) to determine if there are material inconsistencies with the audited financial statements. If there are, the auditor must request correction.

Common mistakes

Thinking the auditor audits or opines on the MD&A.

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