ISA 810 (Revised)

Engagements to Report on Summary Financial Statements

1Objective and scope

ISA 810 (Revised) deals with the auditor's responsibilities relating to an engagement to report on summary financial statements derived from financial statements audited by that same auditor in accordance with ISAs. Summary statements (abridged accounts, the abbreviated financials published in a newspaper or annual review, the summary included in a prospectus or a members' brochure) contain less detail than the audited statements and cannot present all the information the framework requires; users must be told that they are a summary and where the full statements are. The auditor may accept an engagement to report on them only if the auditor has audited the financial statements from which they are derived; the report on summary statements relies on the audit of the full statements and cannot be given by a different auditor.

The objectives are to determine whether it is appropriate to accept the engagement to report on summary financial statements; if engaged, to form an opinion on the summary financial statements based on an evaluation of the conclusions drawn from the evidence obtained; and to express that opinion clearly through a written report that also describes the basis for it.

2Key definitions

3Requirements

Acceptance

• Before accepting, determine whether the applied criteria are acceptable: they are acceptable if established by an authorised or recognised body or by law or regulation; criteria developed by management are acceptable if they are such that the summary statements adequately disclose their summarised nature and identify the audited statements, are clearly described, and would result in summary statements that are not misleading and that fairly represent the audited statements (agreeing with or recomputable from them, and containing the information necessary so that they are not misleading in the circumstances).
• Obtain management's agreement that it acknowledges and understands its responsibility for preparing the summary statements in accordance with the applied criteria, for making the audited financial statements available to the intended users without undue difficulty (or, where law or regulation provides otherwise, for describing where they may be obtained), and for including the auditor's report on the summary statements in any document containing them that indicates that the auditor has reported on them.
• Agree with management the form of opinion to be expressed. If the auditor concludes the criteria are unacceptable or management will not agree to its responsibilities, the auditor does not accept the engagement unless required to by law or regulation, in which case the report does not indicate it was performed in accordance with ISA 810.

Procedures

• Evaluate whether the summary financial statements adequately disclose their summarised nature and identify the audited financial statements.
• When the summary statements are not accompanied by the audited financial statements, evaluate whether they describe clearly from whom or where the audited statements are available, or the law or regulation that specifies that they need not be made available.
• Evaluate whether the summary statements adequately disclose the applied criteria.
• Compare the summary statements with the related information in the audited statements to determine whether they agree with or can be recalculated from it.
• Evaluate whether the summary statements are prepared in accordance with the applied criteria, and whether they contain the information necessary, and are at an appropriate level of aggregation, so as not to be misleading in the circumstances (a summary that omits a going concern uncertainty or a major contingent liability disclosed in the full statements is misleading).
• Evaluate whether the audited statements are available to the intended users without undue difficulty, unless law or regulation provides otherwise.

Form of opinion and effect of the audit report

4Documentation and reporting

• The report on summary financial statements includes: a title indicating an independent auditor's report; the addressee; an introductory paragraph identifying the summary financial statements (title of each statement) and the audited financial statements they are derived from, stating that the summary does not contain all the disclosures required by the framework applied to the audited statements and that reading the summary is not a substitute for reading the audited statements and the auditor's report thereon; a reference to the date of the auditor's report on the audited statements and the type of opinion expressed and any other matter in it; a description of management's responsibility; a statement that the auditor is responsible for expressing an opinion on whether the summary statements are consistent with (or a fair summary of) the audited statements based on procedures conducted in accordance with ISA 810; the opinion; and the auditor's signature, address and date.
• The date of the report on the summary statements is no earlier than the date on which the auditor obtained sufficient appropriate evidence on which to base the opinion, including evidence that the summary statements have been prepared and those with recognised authority have taken responsibility for them; it is never earlier than the date of the auditor's report on the audited statements. If the summary report is dated later, the auditor performs subsequent events procedures under ISA 560 for the period after the audit report, because the summary report refers to the audit report and a fact discovered may affect both.
• Where the summary statements are included with unaudited information (a newspaper advertisement, an annual review), the auditor reads the other information for material inconsistencies with the summary statements or the auditor's knowledge, and, where the audited statements and the summary are in the same document, evaluates that the presentation differentiates them. If the auditor becomes aware that the entity plans to state that the auditor has reported on the summary statements without including the report, the auditor requests the entity to include the report or to remove the reference, and, if it refuses, takes appropriate action to prevent inappropriate reliance.

5Examinable focus