Key Provisions of PSA 710
- Auditors must verify that comparative financial information has been prepared using consistent accounting policies.
- The standard requires auditors to identify and evaluate any significant changes in presentation or policies among the periods compared.
- It mandates proper disclosures relating to comparisons, including explanations for material changes.
Definitions and Concepts
- Comparative financial information refers to financial statements or data of more than one period presented side-by-side.
- Consistency and comparability are essential qualities that the auditor must evaluate to provide a true and fair view.
Procedures Required under PSA 710
- Examination of previous period financial data for consistency with current period statements.
- Assessment of changes in accounting principles or estimates and their disclosure adequacy.
- Review of the appropriateness and completeness of notes related to comparative information.
Penalties and Enforcement
- The resolution implicitly mandates compliance by all practicing auditors under the Professional Regulatory Board of Accountancy.
- Non-compliance may subject audit practitioners to professional disciplinary actions as governed by PRC and the Accountancy Board regulations.
Legal and Professional Authority
- Adoption through the PRC Board of Accountancy resolution and approved by the Professional Regulatory Board.
- Signed by duly authorized officers, lending legal force and regulatory authority to the standard’s adoption.
- The document is accessible for reference at the Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.