The IRBA Board adopts the IAASB’s ISA 720 (Revised), 'The Auditor’s Responsibilities Relating to Other Information'
The Independent Regulatory Board for Auditors (IRBA) communicated the adoption of the International Standard on Auditing (ISA) 720 (Revised), The Auditor’s Responsibilities Relating to Other Information and Related Conforming Amendments or use by Registered Auditors in South Africa.
ISA 720 (Revised) clarifies the auditor's involvement relating to 'other information', which is defined in the standard as financial or non-financial information (other than financial statements and the auditor's report thereon), included in an entity's annual report.
The main changes to the ISA:
The scope of 'other information' was broadened and clarified by linking 'other information' to the concept of an 'annual report'. The standard defines 'annual report' as follows:
The revised standard includes an Appendix that provides a list of examples of amounts and other items that may be included in the 'other information'.
2. Auditor's work effort:
The auditor's work effort as set out in the standard was enhanced with respect to 'other information':
Importantly, the IAASB has retained the concept in extant ISA 720 that other information is not audited (i.e., that auditors do not express any level of assurance on the other information).
IRBA is currently considering the placement and articulation of the "Other reports required by the Companies Act" paragraph in our current auditor's report in context of the revised ISA 720.
The revised Standard is effective for audits of financial statements for periods ending on or after 15 December 2016. It applies to all ISA audits irrespective of the type of entity.