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Implementation Guide to SA 720(Revised), "The Auditors Responsibilities Relating to Other Information" issued by Auditing and Assurance Standards Board
August, 22nd 2019
       Implementation Guide to
Standard on Auditing (SA) 720(Revised)
 The Auditor's Responsibilities
 Relating to Other Information




The Institute of Chartered Accountants of India
          (Set up by an Act of Parliament)
                     New Delhi
© The Institute of Chartered Accountants of India.

All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form, or by any
means, electronic, mechanical, photocopying, recording, or
otherwise, without prior permission, in writing, from the publisher.




Edition         : August 2019


Committee       : Auditing and Assurance Standards Board


Email           : aasb@icai.in


Website         : www.icai.org


Price           : Rs. 100/-


ISBN            : 978-81-8441-581-0


Published by    : The Publication Department on behalf of the
                  Institute of Chartered Accountants of India,
                  ICAI Bhawan, Post Box No. 7100, Indraprastha
                  Marg, New Delhi ­ 110002


Printed by      : Sahitya Bhawan Publications, Hospital Road,
                  Agra 282003
                  August/2019
                                               Foreword

ICAI issued Standard on Auditing (SA) 720(Revised), "The
Auditor's Responsibilities Relating to Other Information" in
2018 which is applicable for audits of financial statements for
financial year 2018-19 and onwards. SA 720(Revised) has
made significant changes to pre-revised SA 720 by
incorporating several new requirements including reporting
requirements on "Other Information". In view of the
significant changes made by revised Standard, it was felt
necessary to provide guidance to the members on this
Standard in the form of an Implementation Guide.
I am happy that continuing with its efforts to issue
Implementation Guides on various Standards on Auditing to
provide appropriate guidance to our members, the Auditing
and Assurance Standards Board of ICAI has brought out this
"Implementation Guide to SA 720(Revised), The Auditor's
Responsibilities Relating to Other Information". The
Implementation Guide is written in an easy to understand
language in a Question-Answer format and is quite
comprehensive.
I compliment CA. G. Sekar, Chairman, CA. Debashis Mitra,
Vice-Chairman and all members of the Auditing and
Assurance Standards Board for bringing out this
Implementation Guide for the benefit of the members. I am
sure that the members would find this Implementation Guide
immensely useful.




August 14, 2019                    CA. Prafulla P. Chhajed
New Delhi                                   President, ICAI
                                                Preface

In the year 2018, ICAI issued SA 720(Revised), The
Auditor's Responsibilities Relating to Other Information. The
Standard is applicable for audits of financial statements for
periods beginning on or after April 1, 2018. The Standard
casts a new reporting requirement on the auditors of listed
entities and corporate entities to include a separate section
on "Other Information" in their audit reports. The Standard
also contains several new requirements regarding auditors'
work effort on other information. The Auditing and Assurance
Standards Board (AASB) of ICAI decided to develop an
Implementation Guide on SA 720(Revised) to provide
reasonable guidance to our members so that they can
discharge their responsibilities in an effective manner.
The AASB feels happy to publish this "Implementation Guide
to SA 720(Revised), "The Auditor's Responsibilities Relating
to Other Information". The Implementation Guide is written in
simple and easy to understand language. For ease of usage
and understanding of the readers, the Implementation Guide
has been written in a "Question ­ Answer" format containing
FAQs on this Standard and their responses.
I wish to place on record high appreciation of CA. Debashis
Mitra, Vice-Chairman of the Board for his whole-hearted
effective co-ordination and contribution in publishing this
material and in various activities of the Board.
I wish to express my sincere thanks to CA. Prafulla
Premsukh Chhajed, Honourable President, ICAI and CA.
Atul Kumar Gupta, Honourable Vice-President, ICAI for their
guidance and support to the activities of the Board
I am extremely grateful to CA. Sanjeev Singhal, Delhi and
his team comprising CA. Deepa Agarwal (key resource
person), CA. Pranav Jain, CA. Gopal Agarwal for taking time
out of their professional and personal preoccupations to
write this Implementation Guide. I also acknowledge the
contribution of CA. Shriniwas Joshi in finalizing this
Implementation Guide.
I also wish to place on record my sincere thanks to all the
Board Members and all the Council Members for their
suggestions, support and guidance in finalising this
Implementation Guide as well as other pronouncements of
the Board. I also wish to thank CA. Megha Saxena,
Secretary, AASB and staff of AASB for their dedicated
efforts.
I am confident that the Implementation Guide would be very
useful for our members and other stakeholders while
performing their functions.


August 14, 2019                               CA. G. Sekar
Chennai                                         Chairman,
                    Auditing and Assurance Standards Board
                                              Contents


Foreword

Preface


                                                    Page No.


Chapter 1 Introduction                                   1-8


Chapter 2 Importance of Reporting on Other              9-14
          Information


Chapter 3 Frequently    Asked    Questions             15-41
          ("FAQs") and Responses


Appendix   Illustrations of Auditor's Reports          42-82
           relating to Other Information given in
           Appendix 2 of SA 720(Revised)
                                                  Chapter 1
                                               Introduction

1.1    This Implementation Guide provides supplementary
guidance to Standard on Auditing (SA) 720(Revised), The
Auditor's Responsibilities Relating to Other Information and has to
be read together with SA 720(Revised). In absence of any
separate requirement, the auditor's opinion does not cover `Other
Information' in documents containing audited financial statements
and the auditor has no specific responsibility for determining
whether or not other information is properly stated except where
there exists a regulatory requirement to do so. However, in case
there are material inconsistencies between the audited financial
statements and the other information, the credibility of the financial
statements would be undermined and thus, it may be considered
necessary by the auditor to review the Other Information.

Scope of the Implementation Guide

1.2     The scope of this Implementation Guide is limited to SA
720(Revised) which is effective for audits of financial statements
                                   st
for periods beginning on or after 1 April 2018.

1.3     This Standard deals with the auditor's responsibilities
relating to other information, whether financial or non-financial
information (other than financial statements and the auditor's
report thereon), included in an entity's annual report. An entity's
annual report may be a single document or a combination of
documents that serve the same purpose.

1.4    It should, however, be noted that this Implementation
Guide is not a replacement of or a substitute for the original
Standard(s) and must not therefore be read on a standalone
basis. It is meant to clarify and augment a practitioner's
understanding of the Standards and provide guidance where
Implementation Guide to SA 720(Revised)

appropriate. Practitioners are therefore urged to first read the
relevant Standard(s) and refer to them as they use this
Implementation Guide. For ease of usage, the various issues in
SA 720(Revised) have been dealt with in an easy-to-follow
"Question ­ Answer" format.
Objective of SA 720(Revised)

1.5     Over past few years, there have been significant
developments in reporting by companies, particularly regarding
the amount of details included in the annual reports, as well as the
importance attributed by various stakeholders to the information in
annual reports beyond the audited financial statements and the
auditor's report.

Annual reports now include more narrative and qualitative
information than in the past, including descriptions of the
company's business model, risk exposures and uncertainties.
Stakeholders have been attaching more importance to such
information as they look for ways to better inform their analysis
and understanding of the more complex areas in the financial
statements, including disclosures.

There is also an emphasis to better integrate information in
financial statements, Management's Discussion and Analysis
(MD&A), and other parts of the annual report.

SA 720 was revised to clarify and increase auditors' involvement
with other information and in process enhance the credibility of
financial statements by specifying appropriate responsibilities of
the auditor relating to the range of other information in documents
containing audited financial statements. SA 720(Revised) seeks to
further align users' expectations and auditors' responsibilities.

SA 720(Revised) would also assist the auditor in complying with
relevant ethical requirements that require the auditor to avoid
being associated with information that the auditor believes
contains a materially false or misleading statements or information


                                 2
                          Implementation Guide to SA 720(Revised)

furnished negligently, or omits or obscures any information
required to be included where such omission or obscurity would
be misleading.
1.6     Reading other information, such as that included in an
entity's annual report, for the purpose of identifying
inconsistencies with the financial statements has been a long-
standing practice in audits. In fact, the auditor's approach to
annual reports (and other documents containing audited financial
statements) has in many jurisdictions and on many audits involved
much more than "reading". Auditors compare amounts in the other
information to the financial statements and the other content in the
document is read and considered based on the audit work
performed.
SA 720(Revised), which addresses the auditor's responsibilities
for other information within the scope of the financial statements
audit, "raises the bar" on these responsibilities by reflecting
current practices by auditors, as well as taking into consideration
the nature of and importance placed on other information in the
current environment.
1.7    The key changes with respect to auditor's responsibilities
under SA 720(Revised) are discussed below:
Enhanced auditor's responsibilities ­ The revised standard has
extended auditor's responsibility and requires auditor to:
    Consider whether there is material inconsistency between the
    other information and the auditor's knowledge obtained in the
    audit (in addition to earlier requirement of determining
    whether there is material inconsistency between the other
    information and the financial statements).
    Respond when the auditor identifies that such material
    inconsistencies appear to exist or when auditor otherwise
    becomes aware that other information appears to be
    materially misstated.
    Report as required by SA 720(Revised).


                                 3
Implementation Guide to SA 720(Revised)

    Remain alert for indications that the other information not
    related to the financial statements or auditor's knowledge
    obtained in the audit appears to be materially misstated.
`Other information' - include documents that are provided to
stakeholders along with the financial statements, and which meet
the definition of an "annual report". An entity's annual report may
be a single document or a combination of documents that serve
the same purpose (e.g. Management Report, Chairman's
Statement, Corporate Governance Statement/ Report, etc.).
In order to facilitate the determination of documents in scope for
an engagement, SA 720(Revised) includes a new requirement for
the auditor to determine, through discussions with management,
which documents comprise the annual report, and the entity's
planned manner and timing of issuance of such documents.
Depending on the applicable law, regulation or custom, one or
more of the following documents may form part of the annual
report (Other Information):
    Management report, management commentary, or operating
    and financial review or similar reports by those charged with
    governance. (for example, a directors' report)
    Chairman's statement.
    Corporate governance statement/reports.
    Financial Highlights.
    Secretarial audit report.
Following are not other information within the scope of this SA:
    Separate industry or regulatory reports (for example, capital
    adequacy reports), such as may be prepared in the banking,
    insurance, and pension industries.
    Corporate social responsibility reports.
    Sustainability reports.
    Diversity and equal opportunity reports.
    Product responsibility reports.

                                 4
                          Implementation Guide to SA 720(Revised)

    Labour practices and working conditions reports.
    Human rights reports.
    Other regulatory filings with the government agencies such as
    the Registrar of Companies.

Additional work effort ­ The requirement given in pre-revised SA
720 to only read the "other information" has been expanded to
include auditor's "consideration" of other information. This will
result in increased work effort by the auditor. This consideration
includes both consistency with the financial statements and
consistency with the knowledge obtained in the audit which
includes auditor's understanding of the entity, and its environment,
including the entity's internal control, matters that are prospective
in nature such as business prospects etc.
As the basis for consideration of whether there is a material
inconsistency between the other information and the financial
statements, SA 720(Revised) requires the auditor to compare
selected amounts or other items in the other information with such
amounts or items in the financial statements.
The new requirement of auditor's consideration of whether there is
a material inconsistency between the other information and the
auditor's knowledge obtained in the audit is more subjective in
nature and would require professional judgement.
If the auditor identifies that a material inconsistency appears to
exist or becomes aware that the other information appears to be
materially misstated the auditor is required to perform additional
audit procedures to conclude whether a material misstatement of
other information or financial statements exists or auditor's
understanding of the entity and its environment needs to be
updated.
The material inconsistency identified by the auditor may indicate
that there is a material misstatement of the financial statements or
of the other information, either of which may undermine the
credibility of the financial statements and the auditor's report
thereon. Such material misstatements may also inappropriately


                                 5
Implementation Guide to SA 720(Revised)

influence the economic decisions of the users for whom the
auditor's report is prepared.
Communication with those charged with governance ­ If the
auditor concludes that a material misstatement exists in other
information obtained prior to the date of the auditor's report and
other information is not corrected after communicating with those
charged with governance, the auditor shall communicate with
those charged with governance about the auditor's plans to
address the material misstatements in the auditor's report.
Auditors should also communicate their expectations in relation to
obtaining the final version of the annual report in a timely manner
and possible implications when other information is obtained after
the date of auditor's report.
Reporting - The auditor's report shall include a separate section
with a heading "Other Information" or other appropriate heading
such as `information other than the financial statements and
auditor's report thereon' in all cases i.e. irrespective of auditor has
something/nothing to report on other information. Such reporting
includes:

    A statement that management is responsible for other
    information;
    Identification of the other information, if any obtained prior to
    the date of the auditor's report. In the case of a listed entity,
    the auditor is also required to identify any other information
    expected to be obtained after the date of the auditor's report;
    A statement that the auditor's opinion does not cover the
    other information and, accordingly, that the auditor does not
    express (or will not express) an audit opinion or any form of
    assurance conclusion thereon;
    A description of the auditor's responsibilities relating to
    reading, considering and reporting on other information; and
    When other information has been obtained prior to the date of
    the auditor's report, either:


                                  6
                          Implementation Guide to SA 720(Revised)

    (i)   A statement that the auditor has nothing to report; or
   (ii)   If the auditor has concluded that there is an uncorrected
          material misstatement of the other information, a
          statement that describes the uncorrected material
          misstatement of the other information.
SA 720(Revised) requires that when the auditor expresses a
qualified or adverse opinion in accordance with SA 705(Revised),
"Modifications to the Opinion in the Independent Auditor's Report",
the auditor shall consider the implications of the matter giving rise
to the modification of opinion for the statement required above in
last bullet point.
If the auditor has not obtained all other information prior to the
date of auditor's report, SA 720(Revised) requires the auditor to
request a written representation from management that the final
version of the outstanding documents will be provided to the
auditor when available, and prior to issuance by the entity to
enable the auditor to complete the procedures required by SA
720(Revised).
Documentation - The auditor is required to document procedures
performed and include in audit documentation the final version of
the other information on which the auditor has performed the work
required under this SA.
Auditors are required to:

    understand and consider the new and revised requirements of
    SA 720(Revised).
    engage into discussions with the audit committee/those
    charged with governance to agree on timelines in a manner
    that the final version of the annual report is provided before
    the issuance of audit report to comply with the requirements
    of SA 720(Revised).
    if annual report is not available before the issuance of audit
    report, obtain a draft including Director's Report along with a
    management representation in writing that the drafts are near


                                 7
Implementation Guide to SA 720(Revised)

    final. The management should intimate the auditor in case
    there are changes made to the draft.
    request a written representation from management that the
    final version of the outstanding documents, if any, will be
    provided to the auditor when available, and prior to issuance
    by the entity to enable the auditor to complete the procedures
    required by SA 720(Revised).
    reiterate the timelines during quarterly communications with
    audit committee/those charged with governance.
    determine and plan for changes in the scope of other
    information subject to the auditor's responsibilities.




                                8
                              Chapter 2
       Importance of Reporting on Other
                            Information

2.1     Companies have been making increasing and more
diverse use of documents other than the annual report (whether
pursuant to law or regulation or voluntarily) for their external
communication purposes with the stakeholders in connection with
the issuance of their audited financial statements. For example, in
many jurisdictions entities are presenting information such as
management reports, or statements on corporate governance or
on internal control and risk assessment, in documents
accompanying the audited financial statements.

2.2     The Basis for Conclusions relating to ISA 720(Revised)
states: "Over recent years there have been significant
developments in corporate reporting, particularly in relation to the
detail included in companies' annual reports, as well as the
importance ascribed by users to the information in annual reports
beyond the audited financial statements and the auditor's report
thereon. The weight that users place on this other information, and
the need for increased clarity in the auditor's report regarding the
auditor's involvement with such other information, has notably
increased since extant ISA 720 was issued. In light of these
developments, the IAASB sought to revise ISA 720 to update and
revise the standard to ensure that it is sufficient and fit-for-purpose
in the context of today's financial reporting environment."

The Auditing and Assurance Standards Board of the ICAI took up
this project of revision of SA 720 and made revisions to align it
with the ISA 720(Revised).

The scope of documents subject to the auditor's responsibilities
under SA 720(Revised) is based on the nature of the documents
that are provided to stakeholders along with the financial
Implementation Guide to SA 720(Revised)

statements, and whether such documents meet the definition of
an "annual report" as set out in the Standard. For listed entities,
what constitutes an "annual report" may be customarily known, or
certain jurisdictions may provide specific guidance as to which
documents in that jurisdiction comprise an "annual report" for the
purposes of the standard. For non-listed entities, the application of
the definition of "annual report" may be more challenging and
likely will vary across engagements. For example, for a private
company, it may be the Directors report required under Section
134 of the Companies Act, 2013.

2.3     SA 720(Revised) is written in the context of an audit of
financial statements by an independent auditor. The auditor's
opinion on the financial statements does not cover the other
information, nor does this Standard require the auditor to obtain
audit evidence beyond that required to form an opinion on the
financial statements.

The expansion of the work effort to include the auditor's
"consideration" of other information is intended to result in a more
active work effort than the earlier requirement to only read the
other information.

2.4     As the basis for the consideration of whether there is a
material inconsistency between the other information and the
financial statements, SA 720(Revised) requires the auditor to
compare selected amounts or other items in the other information
with such amounts or items in the financial statements. The word
"selected" in the requirement is important to convey that
professional judgment is applied to select the amounts or items for
comparison, and that a full comparison is not required.

On the other hand, the new required consideration of whether
there is a material inconsistency between the other information
and the auditor's knowledge obtained in the audit is more
subjective in nature. Although the requirement importantly sets the
boundary for "knowledge obtained in the audit" to be "the audit


                                 10
                          Implementation Guide to SA 720(Revised)

evidence obtained and conclusions reached in the audit", the
standard acknowledges that whether, and to what extent, the
auditor refers to audit documentation or makes inquiries of
engagement team members or component auditors is a matter of
professional judgment. SA 720(Revised) explains that in many
cases, the auditor's recollection of the audit evidence and
conclusions reached in the audit may be sufficient as a basis for
this consideration. In other cases, the auditor may not be able to
perform this consideration based on recollection alone and
reference to audit documentation or other inquiries may be
necessary.

Although today auditors generally consider their learnings and
experiences throughout the course of an audit when reading other
information, and the auditors often refer to audit documentation to
verify certain information in the annual report, there is not a
requirement to do so. The introduction of a requirement creates
the need to more consciously determine when reference to the
workpapers, or other inquiries, is necessary in order to effectively
perform the new required consideration. Also, appropriate
documentation of this new consideration is required.

2.5    The following table presents a comparison of the
requirements in Pre-revised SA 720 to those in SA 720(Revised).

                      Pre-revised SA 720       SA 720(Revised)

Applicable audits     Audits of all entities Audits of all entities
                      (listed  and    non- (listed and non-
                      listed)                listed).
                                               However,          the
                                               reporting
                                               requirements      are
                                               not applicable to
                                               unlisted         non-
                                               corporate entities.



                                11
Implementation Guide to SA 720(Revised)

Scope                Documents                  Financial or non-
                     containing    audited      financial information
                     financial statements       (other than financial
                     and the auditor's          statements and the
                     report thereon             auditor's      report
                                                thereon) included in
                                                an entity's annual
                                                report (which may
                                                consist of one of
                                                more documents)

Work effort          The      auditor     is    The     auditor    is
                     required to read the       required to read the
                     other information to       other    information
                     identify       material    and:
                     inconsistencies,      if
                                                 Consider whether
                     any, with the audited
                                                 there is a material
                     financial statements.
                                                 inconsistency
                     If, on reading the          between the other
                     other information for       information     and
                     the     purpose     of      the        financial
                     identifying material        statements; and
                     inconsistencies, the        Consider whether
                     auditor     becomes         there is a material
                     aware of an apparent        inconsistency
                     material                    between the other
                     misstatement of fact,       information     and
                     the auditor takes           the        auditor's
                     appropriate action.         knowledge
                                                 obtained in the
                                                 audit,    in     the
                                                 context of audit
                                                 evidence obtained
                                                 and    conclusions
                                                 reached in the
                                                 audit;
                                                 Remain         alert,
                                                 while reading the

                               12
                        Implementation Guide to SA 720(Revised)

                                                  other information,
                                                  for indications that
                                                  the            other
                                                  information      not
                                                  related     to   the
                                                  financial
                                                  statements        or
                                                  auditor's
                                                  knowledge
                                                  obtained in the
                                                  audit appears to
                                                  be        materially
                                                  misstated.

Timing   of    work Auditor's              No change
effort              responsibilities apply
                    regardless          of
                    whether the other
                    information         is
                    obtained prior to or
                    after the date of the
                    auditor's report.

Reporting            Exception-based:          A separate Other
requirements         Uncorrected material      Information section
                     inconsistencies           is required to be
                     identified prior to the   included     in   the
                     date of       auditor's   auditor's report:
                     report are reported in
                                                    For all corporate
                     an     Other     Matter
                                                    entities,    when
                     paragraph.
                                                    the auditor has
                                                    obtained some
                                                    or all of the
                                                    other
                                                    information prior
                                                    to the date of
                                                    the       auditor's
                                                    report.


                               13
Implementation Guide to SA 720(Revised)

                                             For          listed
                                             entities,       the
                                             Other
                                             Information
                                             section       must
                                             also be included
                                             when the auditor
                                             expects          to
                                             obtain       other
                                             information after
                                             the     date     of
                                             auditor's report.




                              14
                                 Chapter 3
                Frequently Asked Questions
                   ("FAQs") and Responses
Given below are the responses on key issues of SA
720(Revised) in a Question ­ Answer format.

Question 1: What is the applicability date of SA 720(Revised),
The Auditor's Responsibilities Relating to Other Information?

Response 1: The new reporting standard SA 720(Revised) is
applicable for audits of financial statements for periods beginning
on or after April 1, 2018.

Question 2: For which audits does the auditor need to follow
the SA 720(Revised)?

Response 2: SA 720(Revised) applies to audits of complete sets
of general purpose financial statements of all entities­listed and
unlisted. However, the reporting requirements of this SA do not
apply to unlisted non-corporate entities. The applicability of SA
720(Revised) to different types of entities is given in table below:

                       Listed          Unlisted      Unlisted non-
                      entities        corporate       corporate
                                       entities        entities

All              Applicable        Applicable        Applicable
requirements
except reporting
requirements

Reporting         Applicable       Applicable        Not applicable
requirements
Implementation Guide to SA 720(Revised)

Question 3: Whether SA 720(Revised) is applicable to a
private company or an unlisted entity?
Response 3: SA 720(Revised) is applicable to all private
companies and unlisted corporate entities.
Question 4: Is an auditor of private company or unlisted
entity required to report under SA 720(Revised)?
Response 4: The auditor of a private company or unlisted
corporate entity is required to report on the "Other Information" as
per SA 720(Revised).
Question 5: What was the need for revision of SA 720?
Response 5: In recent years the amount of detail included in
entities' annual reports, and other corporate and external reports,
besides the audited financial statements and the auditor's report,
has changed significantly. Annual reports now include more
narrative and qualitative information, such as descriptions of the
entity's business model and integrated reports. Users have been
attaching more importance to such information and disclosures,
using these to analyse the risks of the business and for decision-
making purposes. There has also been a movement towards
exploring ways in which to better integrate information in financial
statements with other parts of an entity's public reporting package.
SA 720(Revised) will ensure that the SA continues to enhance the
credibility of financial statements through specifying appropriate
responsibilities of the auditor relating to the range of other
information in documents containing audited financial statements,
taking into account how such information is distributed. The
revised standard requires the auditor to read and consider the
other information because other information that is materially
inconsistent with the financial statements or the auditor's
knowledge obtained in the audit may indicate that there is a
material misstatement of the financial statements or that a
material misstatement of the other information exists, either of
which may undermine the credibility of the financial statements
and the auditor's report thereon. Such material misstatements



                                16
                          Implementation Guide to SA 720(Revised)

may also inappropriately influence the economic decisions of the
users for whom the auditor's report is prepared.
Question 6: What is the definition of `Other information'?

Response 6: SA 720(Revised) defines `Other information' as
financial or non-financial information (other than financial
statements and the auditor's report thereon) included in an entity's
annual report. An entity's annual report may be a single document
or a combination of documents that serve the same purpose,
which is to provide owners (or similar stakeholders) with
information on the entity's operations and the entity's financial
results and financial position as set out in the financial statements
(e.g. management report, chairman's statement, corporate
governance statement/report, etc).
The below mentioned documents may be considered as "Other
Information" but is not limited to the following:
    Director's Report (with annexures ­ Annual Return extracts,
    secretarial audit report, annual report on CSR, etc.)
    Management Discussion & Analysis.
    Corporate Governance Report.
    Business Responsibility Report.
    Shareholder Information.
    Any Other Information/Report forming part of the Annual
    Report.
The above list of other documents should not be considered as an
all inclusive list, rather the examples are guiding principles and
whether or not a particular piece of information should be
construed as other information would depend on each case.
Accordingly, the members should exercise their professional
judgment.
Also, auditors should refer to Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
specifying the contents of the annual report. Regulation 34(2) and
34(3) states as below:

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Implementation Guide to SA 720(Revised)

"(2) The annual report shall contain the following:
(a) audited financial statements i.e. balance sheets, profit and
    loss accounts etc [,and Statement on Impact of Audit
    Qualifications as stipulated in regulation 33(3)(d), if
    applicable;]
(b) consolidated financial statements audited by its statutory
    auditors;
(c) cash flow statement presented only under the indirect method
    as prescribed in Accounting Standard-3 or Indian Accounting
    Standard 7, as applicable, specified in Section 133 of the
    Companies Act, 2013 read with relevant rules framed
    thereunder or as specified by the Institute of Chartered
    Accountants of India, whichever is applicable;
(d) directors report;
(e) management discussion and analysis report - either as a part
    of directors report or addition thereto;
(f) for the top [five hundred] listed entities based on market
    capitalization (calculated as on March 31 of every financial
    year), business responsibility report describing the initiatives
    taken by them from an environmental, social and governance
    perspective, in the format as specified by the Board from time
    to time:
    Provided that listed entities other than top [five hundred] listed
    companies based on market capitalization and listed entities
    which have listed their specified securities on SME Exchange,
    may include these business responsibility reports on a
    voluntary basis in the format as specified.
(3) The annual report shall contain any other disclosures specified
in Companies Act, 2013 along with other requirements as
specified in Schedule V of these regulations."
Further, it is also important to understand what should not be
considered as other information. SA 720(Revised) is not
applicable to the following:

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                         Implementation Guide to SA 720(Revised)

(a) Preliminary announcements of financial information; or
(b) Securities offering documents, including prospectuses.
Further, eXtensible Business Reporting Language (XBRL) tags do
not represent other information.
Question 7: What is the period covered by an annual report?
Response 7: An annual report is typically prepared on an annual
basis. However, when the financial statements being audited are
prepared for a period less than or more than a year, an annual
report may also be prepared that covers the same period as the
financial statements.
Question 8: How will the auditor obtain Other Information?
Response 8: The auditor shall:
    Determine, through discussion with management, which
    document(s) comprises the annual report, and the entity's
    planned manner and timing of the issuance of such
    document(s);
    Make appropriate arrangements with management to obtain
    in a timely manner and, if possible, prior to the date of the
    auditor's report, the final version of the document(s)
    comprising the annual report through:
    o   Incorporating the requirement for review of the other
        information in the engagement letter;
    o   Making written request to the management to review
        other information during the engagement. For example,
        review of other information in the meeting of the Audit
        Committee/ Board of directors.
Question 9: Which reports would not form part of the
documents that comprise an annual report and would not be
considered as `other information' within the scope of SA
720(Revised)?

Response 9: An annual report is different in nature, purpose and
content from other reports, such as a report prepared to meet the


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Implementation Guide to SA 720(Revised)

information needs of a specific stakeholder group or a report
prepared to comply with a specific regulatory reporting objective
(even when such a report is required to be publicly available).
Examples of reports that, when issued as standalone documents,
are not typically part of the combination of documents that
comprise an annual report (subject to law, regulation or custom),
and that, therefore, are not other information within the scope of
this SA, include:
    Separate industry or regulatory reports (for example, capital
    adequacy reports), such as may be prepared in the banking,
    insurance, and pension industries.
    Corporate social responsibility reports.
    Sustainability reports.
    Diversity and equal opportunity reports.
    Product responsibility reports.
    Labour practices and working conditions reports.
    Human rights reports.
    Other regulatory filings with the Government agencies such
    as the Registrar of Companies.
If any of the reports as stated above (for example Report on
Corporate Social Responsibility), is included as a part of the
entity's annual report then it would constitute as `other information'
as per the scope of this standard and the required procedures
would need to be performed by the auditor to check the other
information for material inconsistency.
Question 10: What are the key areas of enhancement to SA
720(Revised)?
Response 10: The three key areas of enhancement to the revised
standard are:
    Clarifying the scope of other information subject to the
    auditor's responsibilities by linking it to the concept of an
    "annual report", which may consist of a single document, or a
    combination of documents, that contain or accompany the
    audited financial statements;


                                 20
                         Implementation Guide to SA 720(Revised)

    Expanding the required work effort beyond the earlier
    responsibility to "read" other information to also require the
    auditor to "consider" other information ­ that consideration
    includes both consistency with the financial statements and
    consistency with the knowledge obtained in the audit;
    Increasing the transparency of the auditor's responsibilities
    related to other information through required reporting on
    other information in the auditor's report on the financial
    statements.
Question 11: Whether any communication is required to be
made with the management and those charged with
governance on the requirements of SA 720(Revised)?
Response 11: The auditor should raise awareness of
management and those charged with governance of SA 720
(Revised) and the new requirements. SA 260(Revised),
"Communication with Those Charged with Governance" requires
auditor to discuss matters with those charged with governance.
With regard to `Other information', the auditor should discuss with
the management the following:
    The documents comprising the other information (as defined
    in SA 720(Revised)) and the planned manner and timing of
    the issuance of such documents.
    When the auditor expects to obtain other information after the
    date of the auditor's report, the discussions with those
    charged with governance may also include the actions that
    may be appropriate or necessary if the auditor concludes that
    a material misstatement of the other information exists in
    other information obtained after the date of the auditor's
    report.
Question 12: Is the auditor required to audit `Other
Information' for purpose of expressing an opinion on true and
fair view of the financial information?
Response 12: No, the auditor is only required to read the other
information and consider whether there is a material inconsistency
between the other information and the financial statements to

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Implementation Guide to SA 720(Revised)

ensure that the credibility of the audited financial statements is not
undermined by material inconsistencies between the audited
financial statements and other information.
To be specific it is not the primary purpose of the auditor to
identify and settle material inconsistencies or material
misstatements of fact within other information. Nonetheless, the
auditor can become aware that other information appears to
include material inconsistencies or material misstatements of fact.
Under these circumstances, the auditor should not knowingly
allow audited financial statements, which are the subject of his/her
report, to be included in a document that contains materially false
or misleading other information or a material omission of fact.
If, on reading and consideration of such 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.
Question 13: What is the timing of availability of Other
Information?

Response 13: Auditors are required to discuss and agree with the
management (including the secretarial team and the audit
committee/those charged with governance) on the timing of
availability of the final version of the documents forming part of
annual report. Such final versions forming part of annual report
should be obtained before issuance of the audit report along with
written confirmation that the drafts are near final. These should be
available for auditor's reading and carrying out the procedures
before the issuance of auditor's report to comply with the
requirements of SA 720(Revised).
However, if the auditor has not obtained all other information prior
to the date of auditor's report, SA 720(Revised) requires the
auditor to request a written representation from management that
the final version of the outstanding documents will be provided to
the auditor when available, and prior to issuance by the entity to
enable the auditor to complete the procedures required by SA 720
(Revised).


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                           Implementation Guide to SA 720(Revised)

Question 14: What are the auditor's responsibilities as
required by SA 720(Revised)?
Response 14: The auditor's responsibilities are:
    to read the other information;
    consider whether the other information is materially
    inconsistent with the financial statements or the auditor's
    knowledge obtained in the audit or otherwise appears to be
    materially misstated; and
    if, based on the work performed, the auditor concludes that
    there is a material misstatement of this other information, the
    auditor is required to report that fact.
The auditor's responsibilities relating to other information (other
than applicable reporting responsibilities) apply regardless of
whether the other information is obtained by the auditor prior to, or
after, the date of the auditor's report.
Further it should be noted that the auditor's responsibilities under
SA 720(Revised) do not constitute an assurance engagement on
other information or impose an obligation on the auditor to obtain
assurance about the other information.
Question 15: What is meant by Material inconsistency?






Response 15: Other information that contradicts audited financial
statements would give rise to an inconsistency. 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.
Accordingly, in considering the financial data in the other
information, the auditor shall identify financial data where an
inconsistency would have a material effect on the credibility of the
audited financial statements.
Material inconsistencies
The effect of an inconsistency is considered to be material if,
individually or in aggregate, it could reasonably be expected to


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Implementation Guide to SA 720(Revised)

influence the economic decisions of the intended users taken on
the basis of the audited financial statements and the other
information as a whole.
The above could be explained by way of examples:
i.    Difference in amount reported as turnover in the Directors
      Report and as reported in the audited financial statements;
ii.   A disclosure of the units produced, or a table summarizing
      such production by geographical region in the annual report
      which is not in accordance with the disclosures made in the
      financial statements.
Question 16: What could be possible instances of material
misstatement of facts, which the auditor may become aware
of while reading other information?
Response 16: Certain instances of material misstatement of fact
which the auditor may become aware of while reading other
information, would include but not restricted to the following:
      In the Management Discussion and Analysis, the competitive
      market share held by the company is different from what has
      been placed on record for the auditor and which formed the
      basis of `going concern assumption'.
      Director has been wrongly represented as Independent
      Director and consequently, this may result into non-
      compliance with SEBI Listing regulations.
Question 17: What are the procedures to be performed for
other information if received prior to the date of the auditor's
report?

Response 17: In this case, as and when the management
provides Other Information to the auditor, the auditor should
perform procedures as stated in SA 720(Revised). The
procedures are as stated below:
      Read the narrative information to establish consistency with
      the audited financial statements and their understanding of


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                         Implementation Guide to SA 720(Revised)

   the entity's business and industry, based on the procedures
   already performed in forming audit opinion (Ref. Paragraphs.
   14-15, A23-A24 of SA 720(Revised))

   When other information is only made available to users via
   the entity's website, the version of the other information
   obtained from the entity, rather than directly from the entity's
   website, is the relevant document on which the auditors
   should perform procedures and include in their workpapers.
   Auditor has no responsibility to search for other information,
   including other information that may be on the entity's
   website, nor to perform any procedures to confirm that other
   information is appropriately displayed on the entity's website
   or otherwise has been appropriately transmitted or displayed
   electronically. (Ref. Para. A19 of SA 720(Revised))

   Compare financial information or ratios in the other
   information with auditor's understanding of the entity.
   Auditors are not required to compare all amounts or other
   items in the other information with such amounts or other
   items in the financial statements. Audit Teams should select
   the amounts or other items to compare using professional
   judgment.
   Things to be considered:
   o   The significance of the amount or other item in the
       context in which it is presented. This may affect the
       importance that users attach to the amount or other item
       (e.g., a key ratio or amount).
   o   If quantitative, the relative size of the amount compared
       with accounts or items in the financial statements or the
       other information to which they relate.
   o   The sensitivity of the particular amount or other item in
       the other information (e.g., share based payments for
       senior management).
   When audit teams evaluate the consistency of selected
   amounts or other items in the other information with the


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Implementation Guide to SA 720(Revised)

    financial statements, they should consider the manner of the
    presentation compared to the financial statements.
    Check the clerical accuracy of any financial highlights, multi-
    period summaries or similar data based on the audited
    financial statements.
    Obtain a reconciliation between amounts within the other
    Information and the financial statements from the
    management and: (Ref: Para. A28 of SA 720(Revised))

    o   Comparing items in the reconciliation to the financial
        statements and the Other Information.
    o   Checking whether the calculations               within   the
        reconciliation are arithmetically accurate.
    The auditor should compare the information obtained with
    o   Audit Committee Presentation.
    o   Audit Opinion/Limited Review Opinion. (issued earlier)
    o   Opinion on internal financial controls with reference to
        financial statements.
    o   Key Audit Matters. (if applicable)
    Further, when some document(s) forming part of other
    information will not be available until after the date of the
    auditor's report, written representation will also be required to
    be taken from the management that the final version of such
    document(s) will be provided to the auditor when available,
    and prior to its issuance by the entity, such that the auditor
    can complete the procedures required by this SA.

If, as a result of performing the above stated procedures, the
auditor concludes that a material misstatement in the financial
statements exists or the auditor's understanding of the entity and
its environment needs to be updated, the auditor shall respond
appropriately in accordance with the other SAs.




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                          Implementation Guide to SA 720(Revised)

Question 18: What is misstatement of the Other Information
in the context of SA 720(Revised)?
Response 18: As per SA 720(Revised), a misstatement of the
other information exists when the other information is incorrectly
stated or otherwise misleading (including because it omits or
obscures information necessary for a proper understanding of a
matter disclosed in the other information).
Question 19: What are the procedures to be performed when
the auditor expects to receive some or all other information
after the date of the auditor's report?

Response 19: Regardless of whether the other information is
available prior to or after the date of the auditor's report, the
auditor should perform procedures as stated in SA 720(Revised).
Further, when some document(s) forming part of other information
will not be available until after the date of the auditor's report,
written representation will also be required to be taken from the
management that the final version of such document(s) will be
provided to the auditor when available, and prior to its issuance by
the entity, such that the auditor can complete the procedures
required by this SA. However, when the other information is
obtained after the date of the auditor's report, the auditor is not
required to update the procedures performed in accordance with
paragraphs 6 and 7 of SA 560, "Subsequent Events".

For other information received after the date of the auditor's
report, if the auditor concludes that a material misstatement exists
in such other information, the outcomes can be as below:
    Other information has been corrected ­ no further reporting
    requirement. The auditor needs to perform procedures
    necessary in circumstances which include determining that
    the correction has been made and may include reviewing the
    steps taken by management to communicate with those in
    receipt of the other information, if previously issued, to inform
    them of the revision.



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Implementation Guide to SA 720(Revised)

    Other information has not been corrected ­ the auditor shall
    firstly communicate with those charged with governance, take
    necessary action considering the auditor's legal rights and
    obligations, to seek to have to have the uncorrected material
    misstatement appropriately brought to the attention of users
    for whom the auditor's report is prepared, which includes
    (Ref: para. A49 ­ A50 of SA 720(Revised)):
    o    Providing a new or amended auditor's report to
         management including a modified section in accordance
         with paragraph 22 of SA 720(Revised), and requesting
         management to provide this new or amended auditor's
         report to users for whom the auditor's report is prepared;
    o    Bringing the material misstatement of the other
         information to the attention of the appointing authority;
    o    Communicating with the regulator where required by
         applicable law or regulation about the uncorrected
         material misstatement; or
    o    Considering     the    implications    for   engagement
         continuance. Withdrawal from the engagement, where
         withdrawal is possible under applicable law or regulation1,
         may be appropriate when the circumstances surrounding
         the refusal to correct the material misstatement of the
         other information cast such doubt on the integrity of
         management and those charged with governance as to
         call into question the reliability of representations
         obtained from them during the audit.
Auditors should sensitize the management that `other information'
received after the date of auditor's report should not be dated
before the date of auditor's report. Further, final versions of the
documents forming part of annual report and shared with auditor
in draft form with written confirmation that the drafts are near final
should not be dated before the date of auditor's report.


1
 Reference should also be made to Implementation Guide on Resignation/
Withdrawal from an Engagement to Perform Audit of Financial Statements.

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                           Implementation Guide to SA 720(Revised)

Question 20: When the auditors are required to include an
Other Information section in the auditor's report, what are the
minimum reporting requirements under SA 720(Revised)?

Response 20: The auditor's report should include the following
under the section `Other information':
   A statement that management is responsible for the other
   information.
   An identification of:
    o    Other information, if any, obtained prior to the date of the
         auditor's report.
    o    For an audit of a listed entity, other information, if any,
         expected to be obtained after the date of the auditor's
         report.
   A statement that auditor's opinion does not cover the other
   information and, accordingly, that the auditor does not express
   (or will not express) an audit opinion or any form of assurance
   conclusion thereon.
   A description of auditor's responsibilities relating to reading,
   considering and reporting on other information.
   When other information has been obtained prior to the date of
   auditor's report, either:
    o    A statement that the auditor has nothing to report; or
    o    A statement that describes an uncorrected material
         misstatement of the other information when the auditor
         concludes that a material misstatement of the other
         information exists.
Question 21: What are the reporting requirements w.r.t other
information for an auditor of a Listed Entity?

Response 21: The auditor's report shall include a separate section
with a heading "Other Information" or other appropriate heading
such as `information other than the financial statements and
auditor's report thereon' in all cases i.e. irrespective of auditor has


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Implementation Guide to SA 720(Revised)

something/nothing to report on other information. Para 21(a) of SA
720(Revised) states:
For an audit of financial statements of a listed entity ­ the auditor
has obtained or expects to obtain other information at the date of
the auditor's report i.e. other information is obtained prior to or
after the date of auditor's report.
This implies that for a listed entity, if any other information if
received after the date of auditor's report, it would need to be
identified and stated explicitly in the audit report. For example;
"Other Information
The Company's Board of Directors is responsible for the other
information. The other information comprises the Director's
Report, Secretarial Audit Report, (but does not include the
standalone Ind AS financial statements and our auditor's report
thereon), which we obtained prior to the date of this auditor's
report, and the chairman's statement, corporate social
responsibility report, which is expected to be made available to us
after that date."

Auditors are required to perform procedures as laid out by
requirements stated in SA 720(Revised).
Question 22: What are the reporting requirements w.r.t other
information for an auditor of an Unlisted Corporate Entity?

Response 22: SA 720(Revised) requires reporting on other
information for all companies ­ listed as well as unlisted
companies. The auditor's report shall include a separate section
with a heading "Other Information" or other appropriate heading
such as `information other than the financial statements and
auditor's report thereon' in all cases i.e. irrespective of auditor has
something/nothing to report on other information. Para 21(b) of SA
720(Revised) states:
For an audit of financial statements of an unlisted corporate entity
- the auditor has obtained some or all of the other information i.e.
all or some of other information is obtained prior to the date of
auditor's report.

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                          Implementation Guide to SA 720(Revised)

This implies that in the case of an unlisted company, if the auditor
expects to obtain other information after the date of auditor's
report; the same may not be stated in the audit report. It may be
noted that to this extent the reporting requirement will be different
from the audit report for a listed entity as explained in Question 21
above. For example:
"Other Information
The Company's Board of Directors is responsible for the other
information. The other information obtained at the date of this
auditor's report is information included in the director's report,
chairman's statement, (but does not include the standalone Ind
AS financial statements and our auditor's report thereon)."
However, auditors are required to perform procedures as laid out
by requirements stated in SA 720(Revised).
In this regard, it is important to note that paragraph A52 of SA
720(Revised) provides that for an audit of financial statements of
an unlisted corporate entity, the auditor may consider that the
identification in the auditor's report of other information that the
auditor expects to obtain after the date of the auditor's report
would be appropriate in order to provide additional transparency
about the other information that is subject to the auditor's
responsibilities under this SA. The auditor may consider it
appropriate to do so, for example, when management is able to
represent to the auditor that such other information will be issued
after the date of the auditor's report.
Question 23: Is SA 720(Revised) applicable to unlisted non-
corporate entities?
Response 23: SA 720(Revised) is applicable to unlisted non-
corporate entities except the reporting requirements. This has
been clarified in SA 720(Revised) under the section "Material
Modifications vis-à-vis ISA 720(Revised) which states as below:
"Most of the unlisted non-corporate entities in India may not be
required to issue annual reports containing other information
under the applicable laws or regulations and some of these may


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Implementation Guide to SA 720(Revised)

issue annual reports as per custom or practice in relevant
industry/sector. In the absence of legal and regulatory
requirements regarding annual reports, there are practical
difficulties for auditors to get any other information till the date of
auditor's report in case of unlisted non-corporates entities. Due to
this reason, auditors would not be in a position to report on other
information in case of unlisted non-corporate entities. To deal with
aforesaid situation, Paragraph 21(b) of SA 720(Revised) has been
modified to require reporting on other information in case of
unlisted corporate entities only.
Accordingly, the reporting requirements in SA 720(Revised) will
not be applicable in case of unlisted non-corporate entities.
However, it is clarified that all the other requirements in SA
720(Revised) will be equally applicable to audits of all unlisted
entities."
Question 24: What are the reporting requirements in SA 720
(Revised) wherein the auditor has not obtained other
information prior to the date of the auditor's report or if the
company has not shared any other information with the
auditor?
Response 24: If the auditor of an unlisted company did not receive
any other information prior to the date of the auditor's report, the
auditor may consider to include a paragraph in the auditor's report
on other information. In such a case, the auditor should indicate
this fact while reporting under `Other Information' as illustrated
below.
Illustrative reporting language for an Unlisted Company where no
Other Information is received prior to the date of auditor's report:
"The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the [X report], but does not include the [standalone/
consolidated] financial statements and our auditor's report
thereon.




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                          Implementation Guide to SA 720(Revised)

Our opinion on the [standalone/ consolidated] financial statements
does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the [standalone/ consolidated]
financial statements, our responsibility is to read the other
information and, in doing so, consider whether such other
information is materially inconsistent with the [standalone/
consolidated] financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.
The [X report] is not made available to us as at the date of this
auditor's report. We have nothing to report in this regard."
Question 25: What could be the possible recourse for the
auditor for the non-receipt of other information?
Response 25: SA 720(Revised) does not directly address this
issue. Paragraph 13(c) of SA 720(Revised) requires that "When
some or all of the document(s) determined in (a) will not be
available until after the date of the auditor's report, request
management to provide a written representation that the final
version of the document(s) will be provided to the auditor when
available, and prior to its issuance by the entity, such that the
auditor can complete the procedures required by this SA." Such
representation is required as per SA 580, "Written
Representations".
Accordingly, the auditor has a responsibility to obtain written
representations from the management before issuance of the
audit report. Thereafter it is the responsibility of the management
to share the final version of the document prior to its issuance with
the auditor.
Further, the auditor should communicate with those charged with
governance in writing. After making written request, the auditor is
not duty bound to perform any other procedures and the
communication thus made should be documented appropriately in
the working papers.




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Implementation Guide to SA 720(Revised)

Question 26: When the auditor expresses a qualified opinion
in accordance with SA 705(Revised), what is the
responsibility of the auditor while reporting on other
information?
Response 26: When the auditor expresses a qualified opinion in
accordance with SA 705(Revised), the auditor should consider the
implications of the matter giving rise to the modification of opinion
while reporting under `Other information' paragraph in the audit
report. The auditor should consider whether the other information
is also materially misstated for the same matter as, or a related
matter to, the matter giving rise to the qualified opinion on the
financial statements. A qualified auditor's opinion on the financial
statements may not have an impact on the other information if the
matter in respect of which the auditor's opinion has been modified
is not included or otherwise addressed in the other information
and the matter does not affect any part of the other information.
For example, a qualified opinion on the financial statements
because of non-disclosure of directors' remuneration as required
by the applicable financial reporting framework may have no
implications for the reporting required under this SA. In other
circumstances, there may be implications for such reporting.
Reference may be made to paragraphs A54 to A58 of the SA
720(Revised).
Question 27: What are the documentation requirements
pertaining to other information?

Response 27: Procedures to be performed in relation to the `other
information' should be documented along with the other audit
workpapers. However, if the management provides `other
information' after the date of audit report or otherwise, auditor's
procedures are performed after the date of audit report, then these
procedures including conclusion and reporting thereof should be
documented.
Also, the auditor is required to include in audit documentation the
final version of the other information on which the auditor has
performed the work required under SA 720(Revised). Therefore


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                          Implementation Guide to SA 720(Revised)

the following are the minimum documentation requirements as
required by SA 720(Revised):
   Compliance with SA 230, "Audit Documentation".
   Document procedures performed as per SA 720(Revised).
   Final version of Other Information on which procedures
   performed.
   Management Representations.
Question 28: What are some examples of amounts or items
that may be included in `Other information'?
Response 28: Appendix 1 to SA 720(Revised) contains examples
of amounts or other items that may be included in the other
information which is as below. This list reproduced below is not
intended to be exhaustive:
Amounts

    Items in a summary of key financial results, such as net
    income, earnings per share, dividends, sales and other
    operating revenues, and purchases and operating expenses.
    Selected operating data, such as income from continuing
    operations by major operating area, or sales by geographical
    segment or product line.
    Special items, such as asset dispositions, litigation provisions,
    asset    impairments,    tax    adjustments,       environmental
    remediation provisions, and restructuring and reorganization
    expenses.
    Liquidity and capital resource information, such as cash, cash
    equivalents and marketable securities; dividends; and debt,
    capital lease and minority interest obligations.
    Capital expenditures by segment or division.
    Amounts involved in, and related financial effects of, off-
    balance sheet arrangements.
    Amounts involved in guarantees, contractual obligations, legal
    or environmental claims, and other contingencies.


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Implementation Guide to SA 720(Revised)

    Financial measures or ratios, such as gross margin, return on
    average capital employed, return on average shareholders'
    equity, current ratio, interest coverage ratio and debt ratio.
    Some of these may be directly reconcilable to the financial
    statements.
Other Items
    Explanations of critical accounting estimates and related
    assumptions.
    Identification of related      parties   and    descriptions   of
    transactions with them.
    Articulation of the entity's policies or approach to manage
    commodity, foreign exchange or interest rate risks, such as
    through the use of forward contracts, interest rate swaps, or
    other financial instruments.
    Descriptions of the nature of off-balance sheet arrangements.
    Descriptions of guarantees, indemnifications, contractual
    obligations, litigation or environmental liability cases, and
    other contingencies, including management's qualitative
    assessments of the entity's related exposures.
    Descriptions of changes in legal or regulatory requirements,
    such as new tax or environmental regulations, that have
    materially impacted the entity's operations or fiscal position,
    or will have a material impact on the entity's future financial
    prospects.
    Management's qualitative assessments of the impacts of new
    financial reporting standards that have come into effect during
    the period, or will come into effect in the following period, on
    the entity's financial results, financial position and cash flows.
    General descriptions of the business environment and
    outlook.
    Overview of strategy.
    Descriptions of trends in market prices of key commodities or
    raw materials.



                                 36
                          Implementation Guide to SA 720(Revised)

    Contrasts of supply, demand and regulatory circumstances
    between geographic regions.
    Explanations of specific factors influencing the entity's
    profitability in specific segments.
Question 29: What are the procedures to be performed when
an entity's annual report is available electronically to the
stakeholders i.e. on the entity's website?
Response 29: An annual report may be made available to users in
printed form, or electronically, including on the entity's website. A
document (or combination of documents) may meet the definition
of an annual report, irrespective of the manner in which it is made
available to users.
When other information is only made available to users via the
entity's website, the version of the other information obtained from
the entity, is the relevant document on which the auditor would
perform procedures in accordance with this SA, rather than
directly from the entity's website.
The auditor has no responsibility under this SA to search for other
information, including other information that may be on the entity's
website, nor to perform any procedures to confirm that other
information is appropriately displayed on the entity's website or
otherwise has been appropriately transmitted or displayed
electronically.
Question 30: What are the written representations related to
other information?
Response 30: The auditor should request management to provide
written representations that:
    Management is responsible for the other information;
    the other information is consistent with the financial
    statements (when some or all of the other information is
    obtained prior to the date of the auditor's report);
    the final version of document(s) not available to auditor prior
    to the date of auditor's report will be provided to auditor when

                                 37
Implementation Guide to SA 720(Revised)

    available, and prior to issuance by the entity, such that the
    auditor can perform the procedures as required by SA
    720(Revised).
Question 31: How an auditor should communicate with the
audit committee/those charged with governance in case the
auditor concludes that a material misstatement of the other
information exists?
Response 31: SA 720(Revised) requires the auditor to
communicate the material misstatement in other information to
those charged with governance if the management refuses to
make the correction in the other information. The communication
can be in the form of a written letter or it can also be part of the
audit committee presentation.
Question 32: The annual report also consists information
pertaining to group companies which are not audited by the
parent auditor. What should be the approach required to be
followed by the Parent Company's auditor to address other
information pertaining to group companies? Is there any
additional reporting requirement as per SA 720(Revised) on
the consolidated financial statements?
Response 32: The auditor should consider that the auditor's
responsibilities under SA 720(Revised) do not constitute an
assurance engagement on other information and do not impose
an obligation on the auditor to obtain assurance about the other
information (Para 8 of SA 720(Revised)).
In accordance with paragraph A24 of SA 720(Revised), the group
auditor uses their professional judgement to determine when it is
necessary to make inquiries of a component auditor in addressing
the other information related to that component. For example, in
meeting the requirements of paragraphs 14 and 15 of SA
720(Revised), a group auditor may decide to request a component
auditor to provide assistance with the following:
   Comparing selected amounts or other items in the other
   information (that are intended to be the same as, to
   summarise, or to provide greater detail about, the amounts or

                                38
                           Implementation Guide to SA 720(Revised)

   other items in the financial statements) with such amounts or
   other items in the financial statements.
   Considering if the description of a matter in the other
   information is consistent with knowledge obtained in the audit.
Therefore, as a group auditor, the auditor should read and
consider whether the other information (which pertains to the
holding company and the component(s) audited by the parent
auditor) is materially consistent with (a) the financial statements,
or (b) the knowledge obtained by the parent auditor in the audit, in
the context of audit evidence obtained and conclusions reached in
the audit. If the parent auditor concludes that there is a material
misstatement of this other information, the parent auditor is
required to report that fact in accordance with requirements of
Paragraph 14 of SA 720(Revised).
Considering that `Other information' (as defined in SA
720(Revised)) may include certain information pertaining to the
components not audited by the parent auditor, it is important to
understand the auditor's responsibilities relevant in the context of
their role as an auditor of the standalone and consolidated
financial statements while reporting on `Other information'. As per
requirements of SA 600, `Using the Work of Another Auditor',
wherein the parent auditor reports on the consolidated financial
statements of the entity relying on the work of the component
auditors and carve out such work in auditor's report. However, an
important point to note is that, while reading the other information,
paragraph 15 of SA 720(Revised) also requires the auditor to
remain alert for indications that the other information not related to
the financial statements or the auditor's knowledge obtained in the
audit appears to be materially misstated. Remaining alert for other
indications that the other information not related to the financial
statements or the auditor's knowledge obtained in the audit
appears to be materially misstated assists the auditor in complying
with relevant ethical requirements that require the auditor to avoid
being associated with other information that the auditor believes
contains a materially false or misleading statement, a statement
furnished negligently, or omits or obscures any necessary


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Implementation Guide to SA 720(Revised)

information such that the other information is misleading.
Paragraphs A37 and A38 of SA 720(Revised) provide guidance
on the information/ matters for which the auditor should remain
alert.
However, SA 720(Revised) does not cast any responsibility on the
auditor to evaluate the consistency or perform other procedures
on such information if there are no indications otherwise. This
would assist the auditor in complying with the relevant ethical
requirements that require the auditor to avoid being associated
with other information that the auditor believes contains a
materially false or misleading statement, a statement furnished
negligently, or omits or obscures any necessary information such
that the other information is misleading.
The auditors may consider whether it is necessary to make
inquiries of a component auditor in addressing the other
information related to that component (Ref: para. A24 of SA
720(Revised)). Such enquiries can be made either through
sending instructions or email to the component auditor and
receiving written response from component auditor or may be
documented by way of minutes, if such enquiries have taken place
in person or through a telephone call, with such minutes being
sent to the component auditor by email for their record.
The group auditor is not required to state the fact that he has not
read the `Other information' that specifically relates to other
components (not audited by the parent auditor). With regard to the
information related to components audited by other auditor(s)
included in the annual report of the holding company, the auditors
should:
    request the management of the group to ensure through the
    component management to require the concerned component
    auditor to validate that part of the other information included in
    the annual report of the group that relates to the respective
    component and give a confirmation to that effect (Ref: para.
    A36 of SA 720(Revised)) as part of the statutory audit of that
    component; and


                                 40
                         Implementation Guide to SA 720(Revised)

    obtain management representation with regard to the
    completeness of data and information with regard to other
    information included in the annual report of the components.
There is no additional reporting requirement for a group auditor.
Reference should be made to Illustrations 6 and 7 of SA
720(Revised) for reporting in case of consolidated financial
statements.
Question 33: What are the actions that may be taken by the
auditor if auditor is unable to conclude whether a material
misstatement of the other information exists?

Response 33: The appropriate actions that may be taken when an
auditor is unable to conclude whether a material misstatement of
the other information exists may include:
   Describing the circumstances in the auditor's report;
   Involving internal or external specialists to determine whether
   a material misstatement of the other information exists;
   Withdrawing from the audit, where withdrawal is possible
   under applicable law or regulation.




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Implementation Guide to SA 720(Revised)

                                                       Appendix

Illustrations of Auditor's Reports Relating to Other
Information given in Appendix 2 of SA 720(Revised)
   Illustration 1: An auditor's report of a company, whether listed
   or unlisted, containing an unmodified opinion when the auditor
   has obtained all of the other information prior to the date of the
   auditor's report and has not identified a material misstatement
   of the other information.
   Illustration 2: An auditor's report of a listed company
   containing an unmodified opinion when the auditor has
   obtained part of the other information prior to the date of the
   auditor's report, has not identified a material misstatement of
   the other information, and expects to obtain other information
   after the date of the auditor's report.
   Illustration 3: An auditor's report of an unlisted company
   containing an unmodified opinion when the auditor has
   obtained part of the other information prior to the date of the
   auditor's report, has not identified a material misstatement of
   the other information, and expects to obtain other information
   after the date of the auditor's report.
   Illustration 4: An auditor's report of a listed company
   containing an unmodified opinion when the auditor has
   obtained no other information prior to the date of the auditor's
   report but expects to obtain other information after the date of
   the auditor's report.
   Illustration 5: An auditor's report of a company, whether listed
   or unlisted, containing an unmodified opinion when the auditor
   has obtained all of the other information prior to the date of the
   auditor's report and has concluded that a material
   misstatement of the other information exists.
   Illustration 6: An auditor's report of a company, whether listed
   or unlisted, containing a qualified opinion when the auditor has
   obtained all of the other information prior to the date of the

                               42
                          Implementation Guide to SA 720(Revised)

   auditor's report and there is a limitation of scope with respect
   to a material item in the consolidated financial statements
   which also affects the other information.

   Illustration 7: An auditor's report of a company, whether listed
   or unlisted, containing an adverse opinion when the auditor
   has obtained all of the other information prior to the date of the
   auditor's report and the adverse opinion on the consolidated
   financial statements also affects the other information.




                               43
Implementation Guide to SA 720(Revised)

Illustration 1 ­ An auditor's report of a company, whether
listed or unlisted, containing an unmodified opinion when the
auditor has obtained all of the other information prior to the
date of the auditor's report and has not identified a material
misstatement of the other information.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
    Audit of a complete set of financial statements of a company,
    whether listed or unlisted (registered under the Companies
    Act, 2013) using a fair presentation framework. The audit is
    not a group audit (i.e., SA 6002 does not apply).
    The financial statements are prepared by management of the
    company in accordance with the Accounting Standards
    prescribed under Section 133 of the Companies Act, 2013.
    The terms of the audit engagement reflect the description of
    management's responsibility for the financial statements in SA
    210.
    The auditor has concluded an unmodified (i.e., "clean") opinion
    is appropriate based on the audit evidence obtained.
    The relevant ethical requirements that apply to the audit
    comprise the Code of Ethics issued by ICAI together with the
    other relevant ethical requirements relating to the audit and the
    auditor refers to both.
    Based on the audit evidence obtained, the auditor has
    concluded that a material uncertainty does not exist related to
    events or conditions that may cast significant doubt on the
    company's ability to continue as a going concern in
    accordance with SA 570(Revised).3
    Key audit matters have been communicated in accordance
    with SA 701.4

2
  SA 600, Using the Work of Another Auditor.
3
  SA 570 (Revised), Going Concern.
4
  SA 701, Communicating Key Audit Matters in the Independent Auditor's Report.
The Key Audit Matters section is required for listed entities only.

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                           Implementation Guide to SA 720(Revised)

    The auditor has obtained all of the other information prior to
    the date of the auditor's report and has not identified a material
    misstatement of the other information.
    Those responsible for oversight of the financial statements
    differ from those responsible for the preparation of the financial
    statements.
    In addition to the audit of the financial statements, the auditor
    has other reporting responsibilities required under the
    Companies Act, 2013.
INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the standalone financial statements of ABC
Company Limited ("the Company"), which comprise the balance
sheet as at 31st March 20XX, and the statement of profit and loss,
(statement of changes in equity)5 and statement of cash flows for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other
explanatory information [in which are included the returns for the
year ended on that date audited by the branch auditors of the
company's branches located at (location of branches)]6.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 20XX,
and its profit/loss, (changes in equity)7 and its cash flows for the
year ended on that date.


5
  Where applicable.
6
  Where applicable.
7
  Where applicable.

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Implementation Guide to SA 720(Revised)

Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of
the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and
the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters8
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The Company's Board of Directors is responsible for the other
information. The other information comprises the [information
included in the X report,9 but does not include the financial
statements and our auditor's report thereon.]
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance
conclusion thereon.

8
 The Key Audit Matters section is required for listed entities only.
9
 A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.

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                                    Implementation Guide to SA 720(Revised)

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and Those Charged with
Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)10­see Illustration
1 in SA 700 (Revised).]
Auditor's Responsibilities for the Audit of the Financial
Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
Other Matter11
We did not audit the financial statements/information of
________(number) branches included in the standalone financial
statements of the Company whose financial statements / financial
information reflect total assets of Rs.______ as at 31st March,
20XX and total revenues of Rs._______ for the year ended on
that date, as considered in the standalone financial statements.
The financial statements/information of these branches have been
audited by the branch auditors whose reports have been furnished
to us, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these branches, is based solely
on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
Reporting in accordance with SA 700 (Revised)­see Illustration 1
in SA 700 (Revised).]


10
     SA 700 (Revised), Forming an Opinion and Reporting on Financial Statements.
11
     Where applicable.

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Implementation Guide to SA 720(Revised)

While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.
                                                            For XYZ & Co
                                                   Chartered Accountants
                                                  (Firm's Registration No.)


                                                            Signature
                         (Name of the Member Signing the Audit Report)
                                                       (Designation12)
                                                    (Membership No.)

Place of Signature:
Date:




12
     Partner or Proprietor, as the case may be.

                                        48
                         Implementation Guide to SA 720(Revised)

Illustration 2 ­ An auditor's report of a listed company
containing an unmodified opinion when the auditor has
obtained part of the other information prior to the date of the
auditor's report, has not identified a material misstatement of
the other information, and expects to obtain other information
after the date of the auditor's report.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
   Audit of a complete set of financial statements of a listed
   company (registered under the Companies Act, 2013) using a
   fair presentation framework. The audit is not a group audit
   (i.e., SA 600 does not apply).
   The financial statements are prepared by management of the
   company in accordance with the Accounting Standards
   prescribed under Section 133 of the Companies Act 2013.
   The terms of the audit engagement reflect the description of
   management's responsibility for the financial statements in SA
   210.
   The auditor has concluded an unmodified (i.e., "clean") opinion
   is appropriate based on the audit evidence obtained.
   The relevant ethical requirements that apply to the audit
   comprise the Code of Ethics issued by ICAI together with the
   other relevant ethical requirements relating to the audit and the
   auditor refers to both.
   Based on the audit evidence obtained, the auditor has
   concluded that a material uncertainty does not exist related to
   events or conditions that may cast significant doubt on the
   company's ability to continue as a going concern in
   accordance with SA 570 (Revised).
   Key audit matters have been communicated in accordance
   with SA 701.
   The auditor has obtained part of the other information prior to
   the date of the auditor's report, has not identified a material
   misstatement of the other information, and expects to obtain
   other information after the date of the auditor's report.

                              49
Implementation Guide to SA 720(Revised)

     Those responsible for oversight of the financial statements
     differ from those responsible for the preparation of the financial
     statements.
     In addition to the audit of the financial statements, the auditor
     has other reporting responsibilities required under the
     Companies Act, 2013.

INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the standalone financial statements of ABC
Company Limited ("the Company"), which comprise the balance
sheet as at 31st March 20XX, and the statement of profit and loss,
(statement of changes in equity)13 and statement of cash flows for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other
explanatory information [in which are included the returns for the
year ended on that date audited by the branch auditors of the
company's branches located at (location of branches)]14.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 20XX,
and its profit/loss, (changes in equity)15 and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further

13
   Where applicable.
14
   Where applicable.
15
   Where applicable.

                                 50
                               Implementation Guide to SA 720(Revised)

described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of
the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and
the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The Company's Board of Directors is responsible for the other
information. The other information comprises the X report16 (but
does not include the financial statements and our auditor's report
thereon), which we obtained prior to the date of this auditor's
report, and the Y report, which is expected to be made available to
us after that date.
Our opinion on the financial statements does not cover the other
information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge

16
   A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.

                                     51
Implementation Guide to SA 720(Revised)

obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor's report, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.
[When we read the Y report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter
to those charged with governance and [describe actions
applicable under the applicable laws and regulations]]17
Responsibilities of Management and Those Charged with
Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
Auditor's Responsibilities for the Audit of the Financial
Statements
[Reporting in accordance with SA 700 (Revised) ­ see Illustration
1 in SA 700 (Revised).]
Other Matter18
We did not audit the financial statements/information of
________(number) branches included in the standalone financial
statements of the Company whose financial statements / financial
information reflect total assets of Rs.______ as at 31st March,
20XX and total revenues of Rs._______ for the year ended on
that date, as considered in the standalone financial statements.
The financial statements/information of these branches have been
audited by the branch auditors whose reports have been furnished
to us, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these branches, is based solely
on the report of such branch auditors.
Our opinion is not modified in respect of this matter.

17
   This additional paragraph may be useful when the auditor has identified an
uncorrected material misstatement of the other information obtained after the
date of the auditor's report and has a legal obligation to take specific action in
response.
18
   Where applicable.

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                                  Implementation Guide to SA 720(Revised)

Report on Other Legal and Regulatory Requirements
[Reporting in accordance with SA 700 (Revised) ­ see Illustration
1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.
                                                            For XYZ & Co
                                                   Chartered Accountants
                                                  (Firm's Registration No.)



                                                            Signature
                         (Name of the Member Signing the Audit Report)
                                                       (Designation19)
                                                    (Membership No.)




Place of Signature:
Date:




19
     Partner or Proprietor, as the case may be.

                                        53
Implementation Guide to SA 720(Revised)

Illustration 3 ­ An auditor's report of an unlisted company
containing an unmodified opinion when the auditor has
obtained part of the other information prior to the date of the
auditor's report, has not identified a material misstatement of
the other information, and expects to obtain other information
after the date of the auditor's report.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
   Audit of a complete set of financial statements of an unlisted
   company (registered under the Companies Act, 2013) using a
   fair presentation framework. The audit is not a group audit
   (i.e., SA 600 does not apply).
   The financial statements are prepared by management of the
   company in accordance with the Accounting Standards
   prescribed under Section 133 of the Companies Act 2013.
   The terms of the audit engagement reflect the description of
   management's responsibility for the financial statements in SA
   210.
   The auditor has concluded an unmodified (i.e., "clean") opinion
   is appropriate based on the audit evidence obtained.
   The relevant ethical requirements that apply to the audit
   comprise the Code of Ethics issued by ICAI together with the
   other relevant ethical requirements relating to the audit and the
   auditor refers to both.
   Based on the audit evidence obtained, the auditor has
   concluded that a material uncertainty does not exist related to
   events or conditions that may cast significant doubt on the
   company's ability to continue as a going concern in
   accordance with SA 570 (Revised).
   The auditor is not required, and has otherwise not decided, to
   communicate key audit matters in accordance with SA 701.
   The auditor has obtained part of the other information prior to
   the date of the auditor's report, has not identified a material
   misstatement of the other information, and expects to obtain
   other information after the date of the auditor's report.


                               54
                            Implementation Guide to SA 720(Revised)

     Those responsible for oversight of the financial statements
     differ from those responsible for the preparation of the financial
     statements.
     In addition to the audit of the financial statements, the auditor
     has other reporting responsibilities required under the
     Companies Act, 2013.

INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the standalone financial statements of ABC
Company Limited ("the Company"), which comprise the balance
sheet as at 31st March 20XX, and the statement of profit and loss,
(statement of changes in equity)20 and statement of cash flows for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other
explanatory information [in which are included the returns for the
year ended on that date audited by the branch auditors of the
company's branches located at (location of branches)]21.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 20XX,
and its profit/loss, (changes in equity)22 and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on

20
   Where applicable.
21
   Where applicable.
22
   Where applicable.

                                 55
Implementation Guide to SA 720(Revised)

Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of
the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and
the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The Company's Board of Directors is responsible for the other
information. The other information obtained at the date of this
auditor's report is [information included in the X report,23 but does
not include the financial statements and our auditor's report
thereon]
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information
obtained prior to the date of this auditor's report, we conclude that
there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this
regard.


23
   A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.

                                     56
                          Implementation Guide to SA 720(Revised)

Responsibilities of Management and Those Charged with
Governance for the Financial Statements

[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]

Auditor's Responsibilities for the Audit of the Financial
Statements

[Reporting in accordance with SA 700 (Revised) ­ see Illustration
1 in SA 700 (Revised).]

Other Matter24

We did not audit the financial statements/information of
________(number) branches included in the standalone financial
statements of the Company whose financial statements / financial
information reflect total assets of Rs.______ as at 31st March,
20XX and total revenues of Rs._______ for the year ended on
that date, as considered in the standalone financial statements.
The financial statements/information of these branches have been
audited by the branch auditors whose reports have been furnished
to us, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these branches, is based solely
on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
[Reporting in accordance with SA 700 (Revised) ­ see Illustration
1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.
                                                     For XYZ & Co
                                             Chartered Accountants

24
     Where applicable.

                               57
Implementation Guide to SA 720(Revised)

                                                  (Firm's Registration No.)


                                                            Signature
                         (Name of the Member Signing the Audit Report)
                                                       (Designation25)
                                                    (Membership No.)
Place of Signature:
Date:




25
     Partner or Proprietor, as the case may be.

                                        58
                         Implementation Guide to SA 720(Revised)

Illustration 4 ­ An auditor's report of a listed company
containing an unmodified opinion when the auditor has
obtained no other information prior to the date of the
auditor's report but expects to obtain other information after
the date of the auditor's report.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
·   Audit of a complete set of financial statements of a listed
    company (registered under the Companies Act, 2013) using a
    fair presentation framework. The audit is not a group audit
    (i.e., SA 600 does not apply).
·   The financial statements are prepared by management of the
    company in accordance with the Accounting Standards
    prescribed under Section 133 of the Companies Act, 2013.
·   The terms of the audit engagement reflect the description of
    management's responsibility for the financial statements in SA
    210.
·   The auditor has concluded an unmodified (i.e., "clean")
    opinion is appropriate based on the audit evidence obtained.
·   The relevant ethical requirements that apply to the audit
    comprise the Code of Ethics issued by ICAI together with the
    other relevant ethical requirements relating to the audit and
    the auditor refers to both.
·   Based on the audit evidence obtained, the auditor has
    concluded that a material uncertainty does not exist related to
    events or conditions that may cast significant doubt on the
    company's ability to continue as a going concern in
    accordance with SA 570 (Revised).
·   Key audit matters have been communicated in accordance
    with SA 701.
·   The auditor has obtained no other information prior to the date
    of the auditor's report but expects to obtain other information
    after the date of the auditor's report.
·   Those responsible for oversight of the financial statements

                              59
Implementation Guide to SA 720(Revised)

     differ from those responsible for the preparation of the
     financial statements.
·    In addition to the audit of the financial statements, the auditor
     has other reporting responsibilities required under the
     Companies Act, 2013.


INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the standalone financial statements of ABC
Company Limited ("the Company"), which comprise the balance
sheet as at 31st March 20XX, and the statement of profit and loss,
(statement of changes in equity)26 and statement of cash flows for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other
explanatory information [in which are included the returns for the
year ended on that date audited by the branch auditors of the
Company's branches located at (location of branches)]27.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 20XX,
and its profit/loss, (changes in equity)28 and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further

26
   Where applicable.
27
   Where applicable.
28
   Where applicable.

                                60
                               Implementation Guide to SA 720(Revised)

described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of
the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and
the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The Company's Board of Directors is responsible for the other
information. The other information comprises the [information
included in the X report29, but does not include the financial
statements and our auditor's report thereon]. The X report is
expected to be made available to us after the date of this auditor's
report.
Our opinion on the financial statements does not cover the other
information and we will not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the

29
   A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.

                                     61
Implementation Guide to SA 720(Revised)

other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
[When we read the X report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter
to those charged with governance and(describe actions applicable
in the applicable laws and regulations).]30
Responsibilities of Management and Those Charged with
Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
Auditor's Responsibilities for the Audit of the Financial
Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
Other Matter31
We did not audit the financial statements/information of
________(number) branches included in the standalone financial
statements of the Company whose financial statements / financial
information reflect total assets of Rs.______ as at 31st March,
20XX and total revenues of Rs._______ for the year ended on
that date, as considered in the standalone financial statements.
The financial statements/information of these branches have been
audited by the branch auditors whose reports have been furnished
to us, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these branches, is based solely
on the report of such branch auditors.
Our opinion is not modified in respect of this matter.








30
   This additional paragraph may be useful when the auditor has identified an
uncorrected material misstatement of the other information obtained after the
date of the auditor's report and has a legal obligation to take specific action in
response.
31
   Where applicable.

                                      62
                                  Implementation Guide to SA 720(Revised)

Report on Other Legal and Regulatory Requirements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.
                                                            For XYZ & Co
                                                   Chartered Accountants
                                                  (Firm's Registration No.)


                                                            Signature
                         (Name of the Member Signing the Audit Report)
                                                       (Designation32)
                                                    (Membership No.)
Place of Signature:
Date:




32
     Partner or Proprietor, as the case may be.

                                       63
Implementation Guide to SA 720(Revised)

Illustration 5 ­ An auditor's report of a company, whether
listed or unlisted, containing an unmodified opinion when the
auditor has obtained all of the other information prior to the
date of the auditor's report and has concluded that a material
misstatement of the other information exists.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
   Audit of a complete set of financial statements of a company,
   whether listed or unlisted (registered under the Companies
   Act, 2013) using a fair presentation framework. The audit is
   not a group audit (i.e., SA 600 does not apply).
   The financial statements are prepared by management of the
   company in accordance with the Accounting Standards
   prescribed under Section 133 of the Companies Act, 2013.
   The terms of the audit engagement reflect the description of
   management's responsibility for the financial statements in SA
   210.
   The auditor has concluded an unmodified (i.e., "clean") opinion
   is appropriate based on the audit evidence obtained.
   The relevant ethical requirements that apply to the audit
   comprise the Code of Ethics issued by ICAI together with the
   other relevant ethical requirements relating to the audit and the
   auditor refers to both.
   Based on the audit evidence obtained, the auditor has
   concluded that a material uncertainty does not exist related to
   events or conditions that may cast significant doubt on the
   company's ability to continue as a going concern in
   accordance with SA 570 (Revised).
   Key audit matters have been communicated in accordance
   with SA 701.
   The auditor has obtained all of the other information prior to
   the date of the auditor's report and has concluded that a
   material misstatement of the other information exists.


                               64
                            Implementation Guide to SA 720(Revised)

     Those responsible for oversight of the financial statements
     differ from those responsible for the preparation of the financial
     statements.
     In addition to the audit of the financial statements, the auditor
     has other reporting responsibilities required under the
     Companies Act, 2013.

INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the standalone financial statements of ABC
Company Limited ("the Company"), which comprise the balance
sheet as at 31st March 20XX, and the statement of profit and loss,
(statement of changes in equity)33 and statement of cash flows for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other
explanatory information [in which are included the returns for the
year ended on that date audited by the branch auditors of the
Company's branches located at (location of branches)]34.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 20XX,
and its profit/loss, (changes in equity)35 and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further

33
   Where applicable.
34
   Where applicable.
35
   Where applicable.

                                 65
Implementation Guide to SA 720(Revised)

described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of
the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and
the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The Company's Board of Directors is responsible for the other
information. The other information comprises the [information
included in the X report36, but does not include the financial
statements and our auditor's report thereon.]
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. As described below, we have
concluded that such a material misstatement of the other
information exists.
[Description of material misstatement of the other information]




36
   A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.

                                     66
                                    Implementation Guide to SA 720(Revised)

Key Audit Matters37
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
[Description of each key audit matter in accordance with SA 701.]
Responsibilities of Management and Those Charged with
Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
Auditor's Responsibilities for the Audit of the Financial
Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]
Other Matter38
We did not audit the financial statements/information of
________(number) branches included in the standalone financial
statements of the Company whose financial statements / financial
information reflect total assets of Rs.______ as at 31stMarch,
20XX and total revenues of Rs._______ for the year ended on
that date, as considered in the standalone financial statements.
The financial statements/information of these branches have been
audited by the branch auditors whose reports have been furnished
to us, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these branches, is based solely
on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
[Reporting in accordance with SA 700 (Revised)­see Illustration
1 in SA 700 (Revised).]

37
     The Key Audit Matters section is required for listed entities only.
38
     Where applicable.

                                         67
Implementation Guide to SA 720(Revised)

While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.
                                                            For XYZ & Co
                                                   Chartered Accountants
                                                  (Firm's Registration No.)


                                                             Signature
                          (Name of the Member Signing the Audit Report)
                                                        (Designation39)
                                                     (Membership No.)
Place of Signature:
Date:




39
     Partner or Proprietor, as the case may be.

                                         68
                          Implementation Guide to SA 720(Revised)

Illustration 6 ­ An auditor's report of a company, whether
listed or unlisted, containing a qualified opinion when the
auditor has obtained all of the other information prior to the
date of the auditor's report and there is a limitation of scope
with respect to a material item in the consolidated financial
statements which also affects the other information.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
   Audit of a complete set of consolidated financial statements of
   a company, whether listed or unlisted (registered under the
   Companies Act, 2013) using a fair presentation framework.
   The audit is a group audit (i.e., SA 600 applies).
   The consolidated financial statements are prepared by
   management of the company in accordance with the
   Accounting Standards prescribed under Section 133 of the
   Companies Act, 2013.
   The terms of the audit engagement reflect the description of
   management's responsibility for the consolidated financial
   statements in SA 210.
   The auditor was unable to obtain sufficient appropriate audit
   evidence regarding an investment in a foreign associate. The
   possible effects of the inability to obtain sufficient appropriate
   audit evidence are deemed to be material but not pervasive to
   the consolidated financial statements (i.e., a qualified opinion
   is appropriate).
   The relevant ethical requirements that apply to the audit are
   the Code of Ethics issued by ICAI and the relevant provisions
   of the Companies Act, 2013.
   Based on the audit evidence obtained, the auditor has
   concluded that a material uncertainty does not exist related to
   events or conditions that may cast significant doubt on the
   entity's ability to continue as a going concern in accordance
   with SA 570 (Revised).
   Key audit matters have been communicated in accordance
   with SA 701.

                               69
Implementation Guide to SA 720(Revised)

       The auditor has obtained all of the other information prior to
       the date of the auditor's report and the matter giving rise to the
       qualified opinion on the consolidated financial statements also
       affects the other information.
       Those responsible for oversight of the consolidated financial
       statements differ from those responsible for the preparation of
       the consolidated financial statements.
       In addition to the audit of the consolidated financial
       statements, the auditor has other reporting responsibilities
       required under the Companies Act, 2013.
INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Consolidated Financial
Statements
Qualified Opinion
We have audited the accompanying consolidated financial
statements of ABC Company Limited (hereinafter referred to as
the "Holding Company") and its subsidiaries (the Holding
Company and its subsidiaries together referred to as "the Group"),
its associates and jointly controlled entities, which comprise the
consolidated balance sheet as at March 31, 20XX, and the
consolidated statement of profit and loss, (consolidated statement
of changes in equity)40 and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies
(hereinafter referred to as "the consolidated financial statements").
In our opinion and to the best of our information and according to
the explanations given to us, except for the possible effects of the
matter described in the Basis for Qualified Opinion section of our
report, the aforesaid consolidated financial statements give a true
and fair view in conformity with the accounting principles generally
accepted in India, of the consolidated state of affairs of the Group,
its associates and jointly controlled entities, as at March 31, 20XX,
40
     Where applicable.

                                   70
                         Implementation Guide to SA 720(Revised)

consolidated profit/loss, (consolidated changes in equity)41 and
consolidated cash flows for the year then ended.
Basis for Qualified Opinion
The Group's investment in XYZ Company, a foreign associate
acquired during the year and accounted for by the equity method,
is carried at Rs. XXX on the consolidated balance sheet as at
March 31, 20XX, and ABC's share of XYZ's net income of Rs.
XXX is included in ABC's income for the year then ended. We
were unable to obtain sufficient appropriate audit evidence about
the carrying amount of ABC's investment in XYZ as at March 31,
20XX and ABC's share of XYZ's net income for the year because
we were denied access to the financial information, management,
and the auditors of XYZ. Consequently, we were unable to
determine whether any adjustments to these amounts were
necessary.
We conducted our audit in accordance with Standards on Auditing
(SAs) specified under section 143(10) of the Companies Act,
2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are
independent of the Group and its associates and jointly controlled
entities in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in
India in terms of the Code of Ethics issued by the Institute of
Chartered Accountants of India and the relevant provisions of the
Companies Act, 2013, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion.
Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The company's Board of Directors is responsible for the other
information. The other information comprises the [information

41
     Where applicable.

                              71
Implementation Guide to SA 720(Revised)

included in the X report42, but does not include the consolidated
financial statements and our auditor's report thereon.]
Our opinion on the consolidated financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. As described in the Basis for Qualified
Opinion section above, we were unable to obtain sufficient
appropriate audit evidence about the carrying amount of ABC's
investment in XYZ as at March 31, 20XX and ABC's share of
XYZ's net income for the year. Accordingly, we are unable to
conclude whether or not the other information is materially
misstated with respect to this matter.
Key Audit Matters43
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on
these matters. In addition to the matter described in the Basis for
Qualified Opinion section, we have determined the matters
described below to be the key audit matters to be communicated
in our report.
[Description of each key audit matter in accordance with SA 701.]


42
   A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.
43
   The Key Audit Matters section is required for listed entities only.

                                     72
                           Implementation Guide to SA 720(Revised)

Responsibilities of Management and Those Charged with
Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
2 in SA 700 (Revised).]
Auditor's Responsibilities for the Audit of the Financial
Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
2 in SA 700 (Revised).]
Other Matters
(a) We did not audit the financial statements / financial information
    of ______ subsidiaries, and ______ jointly controlled entities,
    whose financial statements / financial information reflect total
    assets of Rs.______ as at 31st March, 20XX, total revenues of
    Rs._______ and net cash flows amounting to Rs.______ for
    the year ended on that date, as considered in the consolidated
    financial statements. The consolidated financial statements
    also include the Group's share of net profit/loss of Rs. _____
    for the year ended 31st March, 20XX, as considered in the
    consolidated      financial  statements,      in   respect      of
    ____associates, whose financial statements / financial
    information have not been audited by us. These financial
    statements / financial information have been audited by other
    auditors whose reports have been furnished to us by the
    management and our opinion on the consolidated financial
    statements, in so far as it relates to the amounts and
    disclosures included in respect of these subsidiaries, jointly
    controlled entities and associates, and our report in terms of
    sub-section (3) of Section 143 of the Act, in so far as it relates
    to the aforesaid subsidiaries, jointly controlled entities and
    associates, is based solely on the reports of the other auditors.
(b) We did not audit the financial statements / financial information
    of ______ subsidiaries and ______ jointly controlled entities,
    whose financial statements / financial information reflect total
    assets of Rs.______ as at 31st March, 20XX, total revenues of
    Rs._______ and net cash flows amounting to Rs.______ for
    the year ended on that date, as considered in the consolidated

                               73
Implementation Guide to SA 720(Revised)

   financial statements. The consolidated financial statements
   also include the Group's share of net profit/loss of Rs. _____
   for the year ended 31st March, 20XX, as considered in the
   consolidated      financial    statements,     in   respect    of
   ____associates, whose financial statements / financial
   information have not been audited by us. These financial
   statements / financial information are unaudited and have
   been furnished to us by the management and our opinion on
   the consolidated financial statements, in so far as it relates to
   the amounts and disclosures included in respect of these
   subsidiaries, jointly controlled entities and associates, and our
   report in terms of sub-section (3) of Section 143 of the Act in
   so far as it relates to the aforesaid subsidiaries, jointly
   controlled entities and associates, is based solely on such
   unaudited financial statements / financial information. In our
   opinion and according to the information and explanations
   given to us by the management, these financial statements /
   financial information are not material to the Group.
Our opinion on the consolidated financial statements, and our
report on Other Legal and Regulatory Requirements below, is not
modified in respect of the above matters with respect to our
reliance on the work done and the reports of the other auditors
and the financial statements / financial information certified by the
management.
Report on Other Legal and Regulatory Requirements
[Reporting in accordance with SA 700 (Revised)­see Illustration
2 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.


                                                     For XYZ & Co
                                             Chartered Accountants



                                74
                                  Implementation Guide to SA 720(Revised)

                                                  (Firm's Registration No.)


                                                            Signature
                         (Name of the Member Signing the Audit Report)
                                                       (Designation44)
                                                    (Membership No.)
Place of Signature:
Date:




44
     Partner or Proprietor, as the case may be.

                                       75
Implementation Guide to SA 720(Revised)

Illustration 7 ­ An auditor's report of a company, whether
listed or unlisted, containing an adverse opinion when the
auditor has obtained all of the other information prior to the
date of the auditor's report and the adverse opinion on the
consolidated financial statements also affects the other
information.
For purposes of this illustrative auditor's report, the following
circumstances are assumed:
   Audit of a complete set of consolidated financial statements of
   a company, whether listed or unlisted (registered under the
   Companies Act, 2013) using a fair presentation framework.
   The audit is a group audit (i.e., SA 600 applies).
   The consolidated financial statements are prepared by
   management of the company in accordance with the
   Accounting Standards prescribed under Section 133 of the
   Companies Act, 2013.
   The terms of the audit engagement reflect the description of
   management's responsibility for the consolidated financial
   statements in SA 210.
   The consolidated financial statements are materially
   misstated due to the non-consolidation of a subsidiary. The
   material misstatement is deemed to be pervasive to the
   consolidated financial statements. The effects of the
   misstatement on the consolidated financial statements have
   not been determined because it was not practicable to do so
   (i.e., an adverse opinion is appropriate).
   The relevant ethical requirements that apply to the audit are
   the Code of Ethics issued by ICAI and the relevant provisions
   of the Companies Act, 2013.
   Based on the audit evidence obtained, the auditor has
   concluded that a material uncertainty does not exist related to
   events or conditions that may cast significant doubt on the
   entity's ability to continue as a going concern in accordance
   with SA 570 (Revised).
   Key audit matters have been communicated in accordance
   with SA 701.

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                              Implementation Guide to SA 720(Revised)

       The auditor has obtained all of the other information prior to
       the date of the auditor's report and the matter giving rise to
       the adverse opinion on the consolidated financial statements
       also affects the other information.
       Those responsible for oversight of the consolidated financial
       statements differ from those responsible for the preparation of
       the consolidated financial statements.
       In addition to the audit of the financial statements, the auditor
       has other reporting responsibilities required under the
       Companies Act, 2013.

INDEPENDENT AUDITOR'S REPORT
To the Members of ABC Company Limited
Report on the Audit of the Consolidated Financial
Statements
Adverse Opinion
We have audited the accompanying consolidated financial
statements of ABC Company Limited (hereinafter referred to as
the "Holding Company") and its subsidiaries (the Holding
Company and its subsidiaries together referred to as "the Group"),
its associates and jointly controlled entities, which comprise the
consolidated balance sheet as at March 31, 2XXX, the
consolidated statement of profit and loss, (consolidated statement
of changes in equity)45 and the consolidated statement of cash
flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant
accounting policies (hereinafter referred to as the "consolidated
financial statements").
In our opinion and to the best of our information and according to
the explanations given to us, because of the significance of the
matter discussed in the Basis for Adverse Opinion section of our
report, the accompanying consolidated financial statements do not

45
     Where applicable.

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Implementation Guide to SA 720(Revised)

give a true and fair view in conformity with the accounting
principles generally accepted in India, of the consolidated state of
affairs of the Group, its associates and jointly controlled entities,
as at March 31, 20XX, of its consolidated profit/loss, (consolidated
position of changes in equity)46 and the consolidated cash flows for
the year then ended.
Basis for Adverse Opinion
As explained in Note X, the Group has not consolidated subsidiary
XYZ Company that the Group acquired during 20XX because it
has not yet been able to determine the fair values of certain of the
subsidiary's material assets and liabilities at the acquisition date.
This investment is therefore accounted for on a cost basis. Under
the accounting principles generally accepted in India, the Group
should have consolidated this subsidiary and accounted for the
acquisition based on provisional amounts. Had XYZ Company
been consolidated, many elements in the accompanying
consolidated financial statements would have been materially
affected. The effects on the consolidated financial statements of
the failure to consolidate have not been determined.
We conducted our audit in accordance with Standards on Auditing
(SAs) specified under section 143(10) of the Companies Act,
2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are
independent of the Group and its associates and jointly controlled
entities in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in
India in terms of the Code of Ethics issued by the Institute of
Chartered Accountants of India and the relevant provisions of the
Companies Act, 2013, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our adverse opinion.

46
     Where applicable.

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                               Implementation Guide to SA 720(Revised)

Other Information [or another title if appropriate, such as
"Information Other than the Financial Statements and
Auditor's Report Thereon"]
The company's Board of Directors is responsible for the other
information. The other information comprises the [information
included in the X report47, but does not include the consolidated
financial statements and our auditor's report thereon.]
Our opinion on the consolidated financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. As described in the Basis for Adverse
Opinion section above, the Group should have consolidated XYZ
Company and accounted for the acquisition based on provisional
amounts. We have concluded that the other information is
materially misstated for the same reason with respect to the
amounts or other items in the X report affected by the failure to
consolidate XYZ Company.
Key Audit Matters48
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on

47
   A more specific description of the other information, such as "the management
report and chairman's statement," may be used to identify the other information.
48
   The Key Audit Matters section is required for listed entities only.

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Implementation Guide to SA 720(Revised)

these matters. In addition to the matter described in the Basis for
Adverse Opinion section we have determined the matters
described below to be the key audit matters to be communicated
in our report.
[Description of each key audit matter in accordance with SA 701.]
Responsibilities of Management and Those Charged with
Governance for the Financial Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
2 in SA 700 (Revised).]
Auditor's Responsibilities for the Audit of the Financial
Statements
[Reporting in accordance with SA 700 (Revised)­see Illustration
2 in SA 700 (Revised).]
Other Matters
(a) We did not audit the financial statements / financial information
    of ______ subsidiaries, and ______ jointly controlled entities,
    whose financial statements / financial information reflect total
    assets of Rs.______ as at 31st March, 20XX, total revenues of
    Rs._______ and net cash flows amounting to Rs.______ for
    the year ended on that date, as considered in the consolidated
    financial statements. The consolidated financial statements
    also include the Group's share of net profit/loss of Rs. _____
    for the year ended 31st March, 20XX, as considered in the
    consolidated      financial  statements,      in   respect      of
    ____associates, whose financial statements / financial
    information have not been audited by us. These financial
    statements / financial information have been audited by other
    auditors whose reports have been furnished to us by the
    management and our opinion on the consolidated financial
    statements, in so far as it relates to the amounts and
    disclosures included in respect of these subsidiaries, jointly
    controlled entities and associates, and our report in terms of
    sub-section (3) of Section 143 of the Act, in so far as it relates
    to the aforesaid subsidiaries, jointly controlled entities and
    associates, is based solely on the reports of the other auditors.

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                          Implementation Guide to SA 720(Revised)

(b) We did not audit the financial statements / financial information
    of ______ subsidiaries and ______ jointly controlled entities,
    whose financial statements / financial information reflect total
    assets of Rs.______ as at 31st March, 20XX, total revenues of
    Rs._______ and net cash flows amounting to Rs.______ for
    the year ended on that date, as considered in the consolidated
    financial statements. The consolidated financial statements
    also include the Group's share of net profit/loss of Rs. _____
    for the year ended 31st March, 20XX, as considered in the
    consolidated      financial    statements,     in   respect    of
    ____associates, whose financial statements / financial
    information have not been audited by us. These financial
    statements / financial information are unaudited and have
    been furnished to us by the management and our opinion on
    the consolidated financial statements, in so far as it relates to
    the amounts and disclosures included in respect of these
    subsidiaries, jointly controlled entities and associates, and our
    report in terms of sub-section (3) of Section 143 of the Act in
    so far as it relates to the aforesaid subsidiaries, jointly
    controlled entities and associates, is based solely on such
    unaudited financial statements/financial information. In our
    opinion and according to the information and explanations
    given to us by the Management, these financial statements /
    financial information are not material to the Group.
   Our opinion on the consolidated financial statements, and our
   report on Other Legal and Regulatory Requirements below, is
   not modified in respect of the above matters with respect to
   our reliance on the work done and the reports of the other
   auditors and the financial statements / financial information
   certified by the Management.
Report on Other Legal and Regulatory Requirements
[Reporting in accordance with SA 700 (Revised)­see Illustration
2 in SA 700 (Revised).]
While reporting under Section 143(3) of the Companies Act, 2013,
the auditor is required to suitably reword the wordings given in the
Illustration in SA 700(Revised) to meet the circumstances of the
audit.


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Implementation Guide to SA 720(Revised)

                                                            For XYZ & Co
                                                   Chartered Accountants
                                                  (Firm's Registration No.)


                                                            Signature
                         (Name of the Member Signing the Audit Report)
                                                       (Designation49)
                                                    (Membership No.)


Place of Signature:
Date:




49
     Partner or Proprietor, as the case may be.

                                        82

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