Revised ISA 720 increases focus on qualitative disclosures
The International Auditing and Assurance Standards Board (IAASB) has released International Standard on Auditing (ISA) 720 (Revised): The Auditor's Responsibilities Relating to Other Information.
The revisions aim to clarify and increase the auditor's involvement with "other information", defined in the standard as financial and non-financial information, other than the audited financial statements, that is included in entities' annual reports.
Professor Arnold Schilder, IAASB chairman, explained: "It is in the public interest that an auditor undertakes an 'intelligent read' of an annual report, in the context of the knowledge obtained in the audit, and performs certain procedures to ensure the annual report is not materially inconsistent with the audited financial statements."
The ISA 720 (revised) standard also includes new requirements related to auditor reporting on other information that complement the changes arising from the IAASB's new and revised Auditor Reporting standards, issued earlier this year.
Concurrent with those standards, ISA 720 (Revised) will be effective for audits of financial statements for periods ending on or after 15 December 2016.
You can view full information about the standard on the IFAC website.