## SA-710: Comparative Information

### What is Comparative Information?

Prior period information included in the current period financial statements.

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### Two Approaches to Comparative Information

Approach	Description	Nature
Corresponding Figures	Prior period amounts included as integral part of current year FS	Cannot stand alone
Comparative Financial Statements (CFS)	Prior period amounts included for comparison alongside current year FS	Can stand alone

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## PART A: Corresponding Figures

### General Rule

Auditor shall NOT refer to corresponding figures in the auditor's report — unless specific situations arise.

### Situation 1: Prior Period Auditor's Report Exists

Prior Report Type	CY Auditor's Action
Unmodified	Shall NOT refer to it — no action needed
Modified	Check if the matter giving rise to modification is resolved: Resolved → No effect on current report; Unresolved → Modify current period report

### Situation 2: CY Auditor Detects MM in Prior Period FS (Predecessor gave unmodified opinion)

Has management dealt with the misstatement per applicable FRF?
Yes → Not an issue
No → CY Auditor shall issue a modified opinion

### Situation 3: Previous Year FS Were NOT Audited

1. CY Auditor shall state this fact in an Other Matter (OM) paragraph

2. This statement does not relieve the auditor from SA-510 (Initial Audit Engagements) requirements

3. Auditor must ensure opening balances do not contain misstatements

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## PART B: Comparative Financial Statements (CFS)

### General Rule

Auditor shall refer to each period on which an opinion is expressed.

### If CY Auditor Has a Different Opinion from Predecessor Auditor

The CY auditor must disclose substantive reasons in an OM paragraph

### When Prior Period FS Were Audited by a Predecessor Auditor

CY Auditor's report must state:

1. Fact that prior period FS were audited by a predecessor auditor

2. Type of opinion expressed by the predecessor auditor

3. Date of the predecessor's audit opinion

### If CY Auditor Concludes Prior Period FS Are Misstated

Step 1: Request management + TCWG to amend the prior period FS

Step 2: Request predecessor auditor to issue a new report

Predecessor's Response	CY Auditor's Action
Agrees to issue new report	CY Auditor issues opinion only on current period FS
Disagrees (refuses)	CY Auditor issues opinion on both current period AND prior year figures

Worked example

### Example 1

Q: CA Priya is appointed as auditor of MNO Ltd for FY 2023-24. The previous year's FS were audited by CA Sharma, who had issued an unmodified opinion. During her audit, CA Priya discovers that closing inventory of FY 2022-23 was overstated by ₹20 lakhs, affecting opening balances of FY 2023-24. Management has corrected this by adjusting current year FS per AS. What should CA Priya do?

A: CA Priya detected a misstatement in prior period FS. She should check whether management has dealt with it per applicable FRF. Since management has corrected it through adjustment in current year FS (per AS), this is considered dealt with — not an issue. No modification is required. However, CA Priya still has SA-510 obligations to ensure opening balances are properly carried forward.

### Example 2

Q: CA Rahul is auditing GHI Ltd (comparative financial statements). The prior year FS were audited by CA Mehta who issued a qualified opinion on inventory valuation. CA Rahul now concludes, based on his procedures, that the inventory valuation is actually correct and no qualification is warranted. What should he do?

A: CA Rahul has a different opinion from the predecessor (CA Mehta). Under SA-710, he must: (1) refer to each period on which he expresses an opinion, (2) disclose the substantive reasons for his different conclusion in an Other Matter (OM) paragraph. He must also state in his report: the fact that prior year FS were audited by CA Mehta, the type of opinion (qualified), and the date of CA Mehta's opinion.

### Example 3

Q: CA Sonia is auditing JKL Ltd. She concludes that the prior period comparative figures are materially misstated. She asks management to amend them, but the predecessor auditor refuses to issue a new report on the amended figures. What should CA Sonia report?

A: Since the predecessor refuses, CA Sonia must issue an opinion on both the current period AND the prior year comparative figures. She would express her view on both periods, including the identified misstatement in the prior period comparatives.

⚠️ Common exam mistakes

Confusing 'corresponding figures' with 'comparative financial statements' — corresponding figures are integral to the current year FS and cannot stand alone; comparative FS can stand alone and require opinion on each period.
Thinking that when prior year FS were not audited, the auditor has no obligations — the auditor must still satisfy SA-510 (opening balance) requirements and must state the unaudited status in an OM paragraph.
Forgetting the three required disclosures when prior year FS were audited by a predecessor: (1) fact of predecessor's audit, (2) type of opinion, (3) date of opinion.
Assuming the predecessor's agreement/disagreement does not affect the current auditor's report — it directly determines whether the current auditor reports on just the current period or on both periods.
Not knowing that when prior period's modified opinion matter is resolved in current year, the CY auditor need not repeat the modification — resolution removes the issue entirely.

Reference:

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SA-710: Comparative Information — Corresponding Figures and Comparative Financial Statements

Worked example

⚠️ Common exam mistakes