Definition
Supplementary information under AU-C 725 is data presented with audited financial statements but not required by the framework, such as consolidating schedules, details of expenses, or the schedule of expenditures of federal awards. When engaged to report on it, the auditor opines on whether it is fairly stated, in all material respects, in relation to the financial statements as a whole. The auditor reports on it in an other-matter paragraph, often headed Supplementary Information, or in a separate report.
Why it matters in an audit or review
To give that opinion, the auditor performs procedures including inquiry about how the information was prepared, comparing it to the underlying records and the financial statements, and reconciling it to the statements. It is different from other information under AU-C 720, which the auditor only reads and considers. The materiality used is for the statements as a whole.
Example
Illustrative: a nonprofit presents program expenses by grant in a schedule after the notes. The auditor agrees the schedule to the ledger and the statements, and the report states the schedule is fairly stated in relation to the financial statements as a whole.
Common mistakes
Treating a schedule as covered by the main opinion without an in-relation-to opinion.
FAQ
Is supplementary information audited separately?
It is not audited as a stand-alone item. The opinion is given in relation to the statements as a whole.
Sources
- AICPA, AU-C Section 725, Supplementary Information in Relation to the Financial Statements as a Whole
- AICPA, AU-C Section 720, Other Information in Documents Containing Audited 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