## SA 710: Comparative Information

### What is Comparative Information?

Financial statements include prior period figures alongside current year figures.

| | FY 2025-26 (CY) | FY 2024-25 (PY) |

|--|--|--|

| Revenue | XX | XX |

| Total Expenses | XX | XX |

Prior year figures (one or more periods) included in the current year FS = Comparative Information.

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### Objectives of SA 710

1. Obtain SAAE (Sufficient Appropriate Audit Evidence) whether comparative information is presented as per applicable FRF.

2. Report in accordance with the auditor's responsibility for comparative information.

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### Audit Procedures for Comparative Information

Determine whether FS include comparative information and whether it is properly classified.
Evaluate whether comparative info agrees with amounts and disclosures in the prior period.
Check whether accounting policies applied in current period comparative info are consistent with prior period.
If change in accounting policy → verify whether it is properly Accounted, Presented, and Disclosed.

If auditor becomes aware of material misstatement in comparative info:

Perform Additional Audit Procedures (AAP) to obtain SAAE.
If auditor had audited prior period FS → follow requirements of SA 500.
Obtain Written Representations for all periods covered.

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### Two Approaches to Comparative Information

Approach	Description	Audit Opinion Covers
(A) Corresponding Figures	Prior year figures presented alongside CY FS as context	CY FS only
(B) Comparative Financial Statements	Prior year FS presented as a complete, standalone set alongside CY FS	Both periods

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### Reporting Under Corresponding Figures Approach

General Rule: Auditor's opinion shall NOT refer to corresponding figures.

Exceptions — The auditor must refer to corresponding figures in 3 specific cases:

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#### Case 1: Prior Year Auditor Gave a Modified Opinion

Sub-case	Action Required
Matter is resolved in current year	No modification – opinion is clean
Matter is unresolved	Modify CY opinion + include Basis for Opinion paragraph

Basis for Opinion analysis (Note 1):

Does the unresolved matter materially affect CY FS?

Does it affect CY FS?	Basis for Opinion should...
Yes	Refer to both current year figures and corresponding figures
No	Refer to corresponding figures only + modify opinion citing comparability issue

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#### Case 2: Prior Year Opinion Was Unmodified, But Material Misstatement Found in Corresponding Figures

Steps:

1. Check whether treatment has been done in CY (e.g., prior period item recognised in P&L).

2. If not corrected → issue Qualified or Adverse opinion.

3. Include Basis for Opinion: reference to material misstatement in corresponding figures.

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#### Case 3: Prior Period FS Were NOT Audited

Include an Other Matter (OM) Paragraph (per SA 705).
State that prior period FS were not audited and clarify the auditor's responsibility accordingly.

Worked example

### Example 1

Example 1 – Case 1: Prior year modification, now resolved

In FY 2024-25, the auditor of Gamma Ltd qualified the report due to non-provision of doubtful debts of ₹50 lakhs. In FY 2025-26, the company has fully provided for those debts.

Answer: The matter is resolved. The CY auditor need not modify the opinion and need not refer to the prior year modification in the audit report. The corresponding figures exception (Case 1) does not apply.

### Example 2

Example 2 – Case 1: Prior year modification, still unresolved; affects CY FS

In FY 2024-25, a contingent liability of ₹200 lakhs was not disclosed. In FY 2025-26, the liability remains outstanding and material.

Answer: The matter is unresolved and materially affects CY FS. The auditor must:

Modify the CY audit opinion
In the Basis for Opinion paragraph, refer to both current year figures and corresponding figures.

### Example 3

Example 3 – Case 2: Material misstatement in corresponding figures, not corrected

During the FY 2025-26 audit, the auditor discovers that FY 2024-25 closing inventory (now appearing as corresponding figures) was overstated by ₹80 lakhs. The company has not made any correction in FY 2025-26.

Answer:

1. Check if the company recognised a prior period adjustment in FY 2025-26 P&L — they have not.

2. Since the material misstatement is not corrected, the auditor must issue a Qualified or Adverse opinion.

3. The Basis for Opinion paragraph must clearly state the material misstatement in the corresponding figures.

### Example 4

Example 4 – Case 3: Prior period FS unaudited

Delta Ltd was incorporated in FY 2024-25 but did not get its accounts audited. In FY 2025-26, FY 2024-25 figures appear as corresponding figures.

Answer: The auditor of FY 2025-26 should include an Other Matter (OM) Paragraph stating that FY 2024-25 financial statements were not audited, and clarifying that the auditor takes no responsibility for those figures.

⚠️ Common exam mistakes

Confusing Corresponding Figures (opinion covers CY only) with Comparative Financial Statements (opinion covers both periods) — a very common exam error.
Thinking the auditor's opinion always references the prior year in the corresponding figures approach — the general rule is NO reference; only the 3 exception cases require it.
In Case 1, forgetting to analyse whether the unresolved matter affects CY FS — this determines whether the Basis for Opinion refers to both years or only to corresponding figures.
Forgetting that Written Representations must be obtained for ALL periods covered by comparative information, not just the current year.
Treating Case 3 (unaudited prior period) as a modification of opinion — the correct treatment is an Other Matter Paragraph, not a qualification.
Mixing up SA 710 (Comparative Information) with SA 560 (Subsequent Events) — these are separate standards dealing with different time-related audit issues.

Reference:

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SA 710 – Comparative Information: Corresponding Figures and Comparative Financial Statements

Worked example

⚠️ Common exam mistakes