ACCA Audit and Assurance (F8) Practice Exam

What does the Other Information paragraph cover in an audit report?

1. It contains financial summaries that support the auditor's opinion

2. It highlights discrepancies between the financial statements and other reports

3. It outlines operational strategies discussed during audit

4. It provides names of notable stakeholders

The correct answer is: It highlights discrepancies between the financial statements and other reports

The Other Information paragraph in an audit report serves to address information that is not part of the financial statements but is included in the annual report or other documents that accompany the financial statements. This section is crucial because it ensures that any inconsistencies or discrepancies between the financial statements and additional information contained in those documents are highlighted. When auditors issue their opinion, they have a responsibility to consider the context in which the financial statements are presented, including other relevant information that could affect users' understanding of the financial position and performance of the entity. If the auditor identifies any significant discrepancies between what is presented in the financial statements and the other information provided, it is essential that they communicate these findings to maintain transparency and uphold users' trust in the report. This is why the Other Information paragraph’s role focuses on identifying discrepancies rather than detailing financial summaries, operational strategies, or stakeholder names, all of which fall outside the intended purpose of this section of the audit report.