Engagements to Report on Summary Financial Statements

CAS 810

Engagements to Report on Summary Financial Statements

CAS 810

Definitions
  • Summary F/S – Historical financial information that is derived from F/S but that contains less detail than the F/S
Engagement Acceptance
  • The auditor should only accept an engagement to report on summary F/S only when the auditor has been engaged to conduct an audit of the complete F/S from which the summary F/S are derived
  • Before accepting an engagement to report on summary F/S:
    • Determine whether the applied criteria are acceptable
    • Obtain the agreement of management that it acknowledges and understands its responsibility:
      • For the preparation of the summary F/S in accordance with the applied criteria
      • To make the audited F/S available to the intended users of the summary F/S without undue difficulty
      • To include the auditor’s report on the summary F/S in any document that contains the summary F/S and that indicates that the auditor has reported on them
    • Agree with management the form of opinion to be expressed on the summary F/S
Nature of Procedures
  • Must Evaluate whether the summary F/S adequately disclose their summarized nature and identify the audited F/S
  • When summary F/S are not accompanied by the audited F/S, evaluate whether they describe from whom or where the audited F/S are available
  • Evaluate whether the summary F/S adequately disclose the applied criteria
  • Compare the summary F/S with the related information in the audited F/S to determine whether the summary F/S agree with the related information in the audited F/S
  • Evaluate whether the summary F/S are prepared in accordance with the applied criteria
  • Evaluate whether the summary F/S contain the information necessary, and are at an appropriate level of aggregation, so as not to be misleading
  • Evaluate whether the audited F/S are available to the intended users of the summary F/S without undue difficulty
Form of Opinion and Other Issues
  • When issuing an unmodified opinion on the summary F/S, use one of the following phrases:
    1. The summary F/S are consistent, in all material respects, with the audited F/S, in accordance with IFRS/ASPE, ETC…
    2. The summary F/S are a fair summary of the audited F/S, in accordance with IFRS/ASPE, ETC…
  • The auditor’s report on the summary F/S may be dated later than the date of the auditor’s report on the audited F/S (make sure to state in the audit report that the summary F/S and audited F/S do not reflect events that occurred subsequent to ] the audit report date on the complete audited F/S)
  • When the complete audited F/S contains a qualified opinion, but the auditor is satisfied that the summary F/S are consistent or are a fair summary of the audited F/S, the audit report on the summary F/S should:
    1. State that the auditor’s report on the audited F/S contains a qualified opinion; and
    2. Describe:
      • The basis for the qualified opinion on the audited F/S
      • The effect of the qualification on the summary F/S, if any
  • When the complete audited F/S contains an adverse or disclaimer of opinion, the audit report on the summary F/S should:
    1. State that the auditor’s report on the audited F/S contains an adverse or disclaimer of opinion
    2. Describe the basis for that adverse or disclaimer of opinion
    3. State that, due to the adverse or disclaimer of opinion, it is inappropriate to express an opinion on the summary F/S
  • If the summary F/S are not consistent with or are not a fair summary of the audited F/S, express an adverse opinion on the summary F/S

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