Definition
Other information under AU-C 720 is financial or nonfinancial information, other than the financial statements and the auditor's report, included in an entity's annual report, such as management's discussion or a chairman's letter. The auditor does not audit it. The auditor reads it and considers whether it is materially inconsistent with the financial statements or the auditor's knowledge from the audit, or appears materially misstated.
Why it matters in an audit or review
If other information is available before the report date, the report includes an Other Information section describing the responsibilities and the results. If the auditor finds an uncorrected material misstatement of the other information, the report says so. If it arrives after the report date, the auditor still reads it and acts under AU-C 720 if it contains an uncorrected material misstatement.
Example
Illustrative: an annual report says revenue grew 12%. The audited statements show 8%. The auditor raises it with management, who corrects the narrative before the report is released.
Common mistakes
Skipping the read when the document is mostly photographs and charts.
FAQ
Does the auditor give an opinion on other information?
No. The auditor reports only on whether uncorrected material misstatements exist.
Sources
- AICPA, AU-C Section 720, Other Information in Documents Containing Audited Financial Statements (as revised by SAS No. 137)
- AICPA, AU-C Section 700, Forming an Opinion and Reporting on Financial Statements
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error