Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

AU-C 720 Other Information in Documents Containing Audited Financial Statements

AU-C Original Pronouncements

Sources

Statements on Auditing Standards (SASs) 118, 122, and 123.

AU-C Effective Date and Summary of Changes

SAS No. 118 was codified in AU 550 when issued, but was moved to AU-C 720 with the issuance of SAS No. 122. Some conforming changes were made in specific paragraphs and footnotes due to the issuance of SAS No. 122, but no substantive changes were made.

AU-C Definitions of Terms

Source: AU-C 720.05

1. Inconsistency. Other information that conflicts with information contained in the audited financial statements. A material inconsistency may raise doubt about the audit conclusions drawn from audit evidence previously obtained and possibly about the basis for the auditor's opinion on the financial statements.
2. Misstatement of fact. Other information that is unrelated to matters appearing in the audited financial statements that is incorrectly stated or presented. A material misstatement of fact may undermine the credibility of the document containing audited financial statements.
3. Other information. Financial and nonfinancial information (other than the financial statements and the auditor's report thereon) that is included in a document containing audited financial statements and the auditor's report thereon, excluding required supplementary information.

Objective of AU-C Section 720

AU-C Section 720.04 states that:

…the objective of the auditor is to respond ...