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No. 40 The
Auditor’s Responsibilities Relating to Other Information in
Documents Containing Audited Financial Statements |
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 Status |
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Issued by Auditing Standards Committee in Taiwan on 1 July, 2004. |
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Summary |
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The objective of this Statement is to require the auditor to respond
appropriately when documents containing audited financial statements
and the auditor’s report thereon include other information that
could undermine the credibility of those financial statements and
the auditor’s report. |
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Other information may comprise, for example:
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A report by management regarding the company and its operations.
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Financial summaries or highlights.
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A letter to the shareholders.
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Planned capital expenditures.
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Financial ratios and risk analysis.
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The operation of those charged with governance.
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Others as required by the regulations. |
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The auditor shall make appropriate arrangements with management or
those charged with governance to obtain the other information prior
to the date of the auditor’s report. |
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If, on reading the other information, the auditor identifies a
material inconsistency, the auditor shall determine whether the
audited financial statements or the other information needs to be
revised. |
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If revision of the audited financial statements is necessary and
management refuses to make the revision, the auditor shall modify
the opinion in the auditor’s report. |
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If revision of the other information is necessary and management
refuses to make the revision, the auditor shall include in the
auditor’s report an Other Matter(s) paragraph describing the
material inconsistency; or withhold the auditor’s report; or
withdraw from the engagements, and the auditor may base any decision on what further action to take on
advice from the auditor’s legal counsel. |
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If, on reading the other information for the purpose of identifying
material inconsistencies, the auditor becomes aware of an apparent
material misstatement of fact, the auditor shall discuss the matter
with management. If, following such discussions, the auditor still
considers that there is an apparent material misstatement of fact,
the auditor shall request management to consult with a qualified
third party, such as the entity’s legal counsel, and the auditor
shall consider the advice received. If the auditor concludes that
there is a material misstatement of fact in the other information
which management refuses to correct, the auditor shall take
appropriate actions. |
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If management agrees to revise the other information when
material inconsistencies are identified in other information
obtained subsequent to the date of the auditor’s report,
the auditor’s procedures may include reviewing the steps taken by
management to ensure that individuals in receipt of the previously
issued information are informed of the revision. When management
refuses to make the revision of such other information that the
auditor concludes is necessary, appropriate further actions by the
auditor may include obtaining advice from the auditor’s legal
counsel. |
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 Effective
date
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This Statement is effective from 1 January, 2005. |
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