The auditor should read the other information included in annual report. The objective is to identify contradictions if any, between the audited accounts and other information.
Other information generally included in Pakistani annual reports are:
– Company’s basic information
– Director’s report
– Review by the chairman 10 – years’ highlight
– Financial ratios
– Pattern of holding of the shares
Incorrect reporting in any of the above information resulting in contradiction with the accounts would unnecessarily affect the reliance on the audited accounts .
INCONSISTENCY BETWEEN OTHER INFORMATION AND AUDITED ACCOUNTS
If the auditor identifies a material inconsistency between other nformation and audited accounts and he concludes that the fainancial .statements need amendment, which the management does not agree to correct, he would issue a qualified or adverse opinion oil the grounds of disagreement with the management. However, if the amendment is quired in other information, he should pursure the management to end the other information. In rare circumstances, the management may· refuse to amend the other information. In such a case the auditor should add a paragraph emphasizing the matter describing the inconsistencies.