HKSA 810 - Engagements to Report on Summary Financial Statements (Condensed)
| Section | Key Concept | Brief Description |
|---|---|---|
| Introduction | Scope & Effective Date | Applies only when the same auditor audited the underlying financial statements; effective for periods beginning on/after 15 Dec 2009. |
| Objectives | Acceptance & Opinion | Determine if engagement is appropriate; form and express an opinion on the summary financial statements. |
| Definitions | Key Terms | Defines applied criteria, audited financial statements, and summary financial statements. |
| Requirements | Engagement Acceptance | Prerequisite: auditor must have audited the source financial statements; must obtain management agreement on responsibilities. |
| Requirements | Procedures | Evaluate disclosure, comparability, criteria compliance, and whether statements are misleading. |
| Requirements | Form of Opinion | Unmodified: “consistent, in all material respects” or “fair summary”; modified opinions require specific disclosures. |
| Requirements | Reporting Elements | Includes title, addressee, introductory paragraph, management responsibility, auditor responsibility, opinion, signature, date, address. |
| Hong Kong Specific | Companies Ordinance Compliance | Additional requirements under CO sections 439-441 and the Companies (Summary Financial Reports) Regulation. |
Introduction & Scope
Scope of HKSA 810
HKSA 810 deals with the auditor's responsibilities when engaged to report on summary financial statements derived from financial statements that the same auditor has audited in accordance with HKSAs.
Effective Date
Effective for engagements for periods beginning on or after 15 December 2009. The standard has been subsequently amended for the Hong Kong Companies Ordinance (Cap. 622) and other updates.
Objectives & Definitions
Auditor's Objectives
- Determine whether it is appropriate to accept the engagement.
- Form an opinion on the summary financial statements based on evidence obtained.
- Express that opinion clearly in a written report describing the basis for the opinion.
Key Definitions
| Term | Definition |
|---|---|
| Applied criteria | The criteria used by management to prepare the summary financial statements. |
| Audited financial statements | Financial statements audited by the auditor in accordance with HKSAs, from which the summary statements are derived. |
| Summary financial statements | Historical financial information derived from audited financial statements, containing less detail but providing a structured representation consistent with the original statements. |
Engagement Acceptance
Prerequisite for Acceptance
The auditor must have been engaged to audit the financial statements from which the summary statements are derived.
Pre-acceptance Procedures
Before accepting, the auditor shall:
- Determine whether the applied criteria are acceptable.
- Obtain management's agreement to:
- Prepare the summary financial statements in accordance with the applied criteria.
- Make the audited financial statements available to intended users without undue difficulty.
- Include the auditor's report on the summary financial statements in any document that contains them and indicates the auditor has reported on them.
- Agree on the form of opinion to be expressed.
When Not to Accept
If the criteria are unacceptable or management agreement cannot be obtained, the auditor shall not accept the engagement unless required by law or regulation.
Procedures & Form of Opinion
Nature of Procedures
The auditor shall perform the following procedures as the basis for the opinion:
| Procedure | Description |
|---|---|
| (a) | Evaluate whether the summary financial statements adequately disclose their summarized nature and identify the audited financial statements. |
| (b) | If not accompanied by audited financial statements, evaluate whether they describe where the audited statements are available or the relevant law/regulation. |
| (c) | Evaluate whether the applied criteria are adequately disclosed. |
| (d) | Compare the summary statements with the audited financial statements to ensure they agree or can be recalculated. |
| (e) | Evaluate whether the summary statements are prepared in accordance with the applied criteria. |
| (f) | Evaluate whether the summary statements contain necessary information and are not misleading. |
| (g) | Evaluate whether the audited financial statements are available to intended users without undue difficulty. |
Form of Opinion
For an unmodified opinion, use one of the following phrases:
- “The summary financial statements are consistent, in all material respects, with the audited financial statements, in accordance with [the applied criteria].”
- “The summary financial statements are a fair summary of the audited financial statements, in accordance with [the applied criteria].”
If law or regulation prescribes different wording, the auditor must apply additional procedures and evaluate whether users might misunderstand the opinion.
Timing, Subsequent Events & Auditor's Report
Timing of Work
The auditor's report on the summary financial statements may be dated later than the date of the report on the audited financial statements. If so, the report must state that the summary statements do not reflect the effects of events occurring after the date of the audit report.
Elements of the Auditor's Report
The report must include:
| Element | Description |
|---|---|
| (a) | Title clearly indicating it is the report of an independent auditor. |
| (b) | Addressee. |
| (c) | Introductory paragraph identifying the summary financial statements, the audited financial statements, and the audit report date. |
| (d) | Description of management's responsibility for the summary financial statements. |
| (e) | Statement that the auditor is responsible for expressing an opinion based on the procedures required by this HKSA. |
| (f) | Paragraph clearly expressing the opinion. |
| (g) | Auditor's signature. |
| (h) | Date of the auditor's report (no earlier than the date of the audit report on the audited financial statements). |
| (i) | Auditor's address. |
Modifications, Comparatives & Other Information
Modifications to the Opinion on Audited Financial Statements
- Qualified opinion, Emphasis of Matter, or Other Matter: The report on the summary statements must state this and describe the basis and effect on the summary statements.
- Adverse opinion or Disclaimer of opinion: The report must state that it is inappropriate to express an opinion on the summary financial statements.
Modified Opinion on Summary Financial Statements
If the summary financial statements are not consistent or are not a fair summary, and management refuses to make changes, the auditor shall express an adverse opinion.
Comparatives
If the audited financial statements contain comparatives but the summary statements do not, the auditor must determine whether the omission is reasonable. If unreasonable, the auditor must determine the effect on the report.
Other Information
The auditor shall read other information in documents containing the summary financial statements to identify material inconsistencies. If a material inconsistency is found, the auditor must determine whether the summary statements or the other information needs revision.
Hong Kong Specific Guidance (Appendices 2 & 3)
Hong Kong Specific Guidance
Companies Ordinance Context
Under the Companies Ordinance (Cap. 622), directors may prepare a summary financial report derived from the reporting documents. The report may be sent to members instead of the full documents (s. 441).
Form of Opinion in Hong Kong
The auditor must form an opinion on whether:
- The summary financial report is consistent with the reporting documents from which it is derived.
- It complies with the requirements of Part 2 of the Companies (Summary Financial Reports) Regulation.
Key Provisions
| Section | Requirement |
|---|---|
| s. 439 | Directors may prepare a summary financial report; must contain prescribed information. |
| s. 440 | Summary financial report must be approved by directors and signed by a director. |
| s. 441 | Company may send a copy of the summary financial report to members instead of the reporting documents. |
| Reg. s. 4 | Must contain auditor's statement on whether the audit report is qualified or modified; if modified, set out the full audit report. |
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