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SSA 720 (Revised) and its Conforming Amendments

ISCA today issues the revised Singapore Standard on Auditing (SSA) 720. SSA 720 (Revised), which is based on International Standard on Auditing (ISA) 720 (Revised) issued by the International Auditing and Assurance Standards Board (IAASB), deals with the auditor’s responsibilities relating to other information (OI). Over recent years, there have been significant developments in corporate reporting, as well as the importance ascribed by users to the information in annual reports beyond the audited financial statements and the auditor’s report thereon. Hence, the IAASB sought to undertake this project to revise ISA 720 to ensure that it remains relevant in the context of today’s financial reporting environment. 

The key changes from the extant standard are:  

  • Broadening and clarifying the scope of OI by linking it to the concept of an “annual report”;
  • Instituting transparency by requiring reporting on the auditor’s work relating to OI in the auditor’s report of listed entities, and conditional reporting for non-listed entities;
  • Enhancing the clarity and expanding the auditor’s work effort with respect to OI in the following areas:
    • Obtaining OI from management in a timely manner;
    • Reading and considering whether there is material inconsistency between OI and (1) the financial statements; and (2) the auditor’s knowledge obtained in the audit;
    • Responding when a material inconsistency appears to exist or OI appears to be materially misstated;
    • Responding when the auditor concludes that a material misstatement of OI exists; and
    • Responding when a material misstatement in the financial statements exists or when the auditor’s understanding of the entity and its environment needs to be updated.
  • Providing new application and other explanatory materials to illustrate how certain requirements may be applied, including the procedures the auditor may perform and considerations to be made when the auditor considers the existence of material inconsistencies;
  • Prescribing the contents of the OI section in the auditor’s report when reporting is required; and
  • Providing illustrative examples to show how reporting on OI may be done in various circumstances.

Please click here for SSA 720 (Revised).

Conforming Amendments

 Conforming amendments are also made to 16 other SSAs, Audit Guidance Statement (AGS) 5 and AGS 10.

SSA 210, Agreeing the Terms of Audit Engagements 
SSA 230, Audit Documentation
SSA 260 (Revised), Communication with Those Charged with Governance
SSA 450, Evaluation of Misstatements Identified during the Audit
SSA 500, Audit Evidence
SSA 510, Initial Audit Engagements – Opening Balances
SSA 560, Subsequent Events
SSA 570 (Revised), Going Concern
SSA 580, Written Representations
SSA 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors)
SSA 700 (Revised), Forming an Opinion and Reporting on Financial Statements
SSA 701, Communicating Key Audit Matters in the Independent Auditor’s Report
SSA 705 (Revised), Modifications to the Opinion in the Independent Auditor’s Report
SSA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report
SSA 710, Comparative Information – Corresponding Figures and Comparative Financial Statements
SSA 810, Engagements To Report On Summary Financial Statements
AGS 5 (Revised), Audits of Entities in Specific Industries, Professions or Vocations
AGS 10, Joint Audits

Effective Date

SSA 720 (Revised) and its related conforming amendments are effective for audits of financial statements for periods ending on or after 15 December 2016, in line with the effective date for the new and revised auditor reporting standards.