How auditors distinguish RSI, supplementary information, and other information presented with audited financial statements.
Audited financial statements are often accompanied by information that is not part of the basic financial statements. The auditor’s responsibility depends on the category of information and the engagement terms. Required supplementary information, supplementary information, and other information look similar in a report package, but they do not receive the same procedures or assurance.
AUD questions usually turn on classification. Required supplementary information receives limited procedures but no opinion unless separately engaged. Supplementary information may receive an in-relation-to opinion if the auditor is engaged to provide one. Other information is read for material inconsistencies or material misstatements of fact; it is not audited as part of the financial statement opinion.
flowchart TD
A["Information accompanies audited statements"] --> B{"Required by framework?"}
B -- "Yes" --> C["RSI: limited procedures, no opinion"]
B -- "No" --> D{"Engaged for in-relation-to opinion?"}
D -- "Yes" --> E["Supplementary information: additional procedures"]
D -- "No" --> F{"Included in annual report or similar document?"}
F -- "Yes" --> G["Other information: read for inconsistencies"]
F -- "No" --> H["No special assurance unless engaged"]
Required supplementary information is required by the applicable reporting framework but is not part of the basic financial statements. Examples may include management’s discussion and analysis for certain entities or schedules required by governmental accounting standards.
| RSI responsibility | Auditor action |
|---|---|
| Determine whether RSI is included | Identify required schedules or narrative information |
| Perform limited procedures | Inquire of management and compare for consistency with audited statements |
| Evaluate presentation | Consider whether information appears to follow framework guidelines |
| Report responsibility | State that limited procedures were performed and no opinion is expressed |
| If RSI is omitted or deficient | Add required report language describing the omission or deficiency |
Limited procedures do not provide audit assurance. The auditor does not test RSI with the same depth as the basic financial statements unless separately engaged or otherwise required.
Supplementary information may accompany the basic financial statements to provide additional detail, such as a schedule of expenditures of federal awards, consolidating schedules, or detailed expense schedules. If the auditor is engaged to report on whether the supplementary information is fairly stated in relation to the financial statements as a whole, additional procedures are required.
| In-relation-to procedure | Purpose |
|---|---|
| Determine management responsibility | Management remains responsible for the supplementary information |
| Reconcile to audited statements | Confirm the supplementary schedule ties to audited balances |
| Test underlying information as needed | Address data not already tested in the audit |
| Evaluate presentation | Determine whether the information is fairly stated in relation to the statements |
| Report separately | Express the in-relation-to opinion only in relation to the financial statements as a whole |
An in-relation-to opinion is not a separate standalone audit of the supplementary schedule. It is tied to the audit of the financial statements as a whole.
Other information appears in documents containing audited financial statements, such as annual reports. Examples include management letters, operating highlights, selected non-GAAP measures, charts, narrative discussion, or unaudited performance metrics.
| Other information responsibility | Auditor action |
|---|---|
| Read the other information | Look for material inconsistencies with audited statements |
| Compare selected amounts | Identify contradictions with audited numbers or disclosures |
| Consider misstatements of fact | Evaluate whether statements appear materially misleading |
| Discuss issues with management | Request correction of material inconsistencies |
| Respond if unresolved | Consider report language, withholding report use, withdrawal, or other actions depending on facts |
The auditor does not audit other information merely because it is included near audited statements. The responsibility is to read and respond to material inconsistency or material misstatement of fact.
| Category | Part of basic financial statements? | Usual auditor responsibility | Opinion? |
|---|---|---|---|
| Required supplementary information | No | Limited procedures | No opinion unless separately required or engaged |
| Supplementary information with in-relation-to engagement | No | Additional procedures tied to audited statements | Opinion in relation to financial statements as a whole |
| Other information | No | Read for material inconsistencies or factual misstatements | No audit opinion |
| Basic financial statements | Yes | Audit procedures under GAAS or PCAOB standards | Audit opinion |
If information is mislabeled or placed confusingly, the auditor considers whether users may misunderstand the level of assurance. Clear headings and report wording matter.
Do not audit RSI by default. Limited procedures are not the same as an opinion.
Do not treat an in-relation-to opinion as a standalone opinion on supplementary information.
Do not ignore misleading other information. The auditor reads it and responds to material inconsistencies.
Do not assume every schedule near audited statements receives audit assurance.