Guide for Auditors

Auditing Summary
Financial Statements
STANDARD DISCUSSED
CAS 810, Engagements to Report on Summary Financial Statements

CANADIAN AUDITING STANDARDS IMPLEMENTATION|PRACTITIONER SUPPORT

Guide for Auditors

Auditing Summary
Financial Statements
STANDARD DISCUSSED
CAS 810, Engagements to Report on Summary Financial Statements

Disclaimer
This guide provides non-authoritative guidance and has not been adopted,
endorsed, approved or otherwise acted upon by the Auditing and Assurance
Standards Board, any CPA Canada board or committee, the governing body or
membership of CPA Canada or any provincial institute/Ordre. It is based on the
CASs as of February 2014. Practitioners are expected to use professional judgment in determining whether the material in this guide is both appropriate and
relevant to the circumstances of their particular engagement.

About this Publication

CPA Canada undertakes initiatives to support practitioners and businesses in
the implementation of standards. This guide provides non-authoritative guidance for practitioners auditing summary financial statements under Canadian
Auditing Standard (CAS) 810, Engagements to Report on Summary Financial
Statements. CPA Canada expresses its appreciation to staff, Taryn Abate,
CPA, CA, and Andre Lavigne, CPA, CA, for preparing this guide. It has not
been adopted, endorsed, approved or otherwise acted on by the Auditing and
Assurance Standards Board, any CPA Canada board or committee, the governing body or membership of CPA Canada or any provincial institute/Ordre.
This guide is based on the CASs as of February 2014. Auditors are expected
to use professional judgment in determining whether the material in this
guide is both appropriate and relevant to the circumstances of their particular
engagements.

Table of Contents
Purpose and Scope of this Guide
Diagram: CAS 810 requirements discussed in this guide

1
1

Q1: What are summary financial statements?

Q2: Are there generally recognized criteria for preparing summary

financial statements? How does this affect the audit?

Q3: What conditions must be satisfied and what actions must be

performed before accepting an engagement to report on summary
financial statements?

Q4: How does the auditor determine if the applied criteria are acceptable? 3
Q5: What guidance can the auditor give clients on developing the applied
criteria?

Example 1: Note disclosure of applied criteria

Q6: Do summary financial statements need to have comparative

information?

Example 2: Modification to the auditors report for comparative

information

Q7: When the auditor has already reported on the audited financial
statements, what additional procedures are required to complete
the engagement?

Q8: How is an auditors report on summary financial statements

different?

Example 3: Sample auditors report

Q9: Are there any differences in the auditors report when the financial
statements are based on a special purpose framework?
Example 4: Modification to the auditors report when using
a special purpose framework
Other resources

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11
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GUIDE FOR AUDITORS|Auditing

Summary Financial Statements

PURPOSE AND SCOPE OF THIS GUIDE

This Guide provides guidance to auditors who report on summary financial
statements derived from an entitys audited financial statements. It discusses
areas that have been noted as difficult when:
preparing summary financial statements; and
reporting on summary financial statements in accordance with CAS 810.
The table below shows the topics Canadian Auditing Standard (CAS) 810,
Engagements to Report on Summary Financial Statements, addresses with
their corresponding paragraph references. The dark green sections are the
topics discussed in this Guide. The columns Questions and Ex.s show the
topics covered by each question and example to facilitate navigation through
the Guide.
Diagram: CAS 810 requirements discussed in this guide
CAS 810

Engagement
Acceptance

Procedures

Questions

Ex.s

CAS 810 Sections and References

Audited financial statements

Par. 5

Acceptable applied criteria

Par. 6(a)

Managements responsibilities

Par. 6(bc)

Nature of procedures

Par. 8

Form of opinion

Par. 911

Timing of work and events subsequent

to the date of the auditors report

Par. 1213

2, 4

2, 5

Auditors report on summary financial

statements

Par. 1419

Restriction on distribution or use or

alerting readers to the basis of
accounting

Par. 20

Comparitives

Par. 2122

Unaudited supplementary information presented with summary financial

statements

Par. 23

Other information in documents containing summary financial statements

Par. 24

Auditor association

Par. 2526

Reporting

Other
Auditors
Responsibilities

The Questions and Ex.s relate to the following:

Assurance question
Accounting question
Example

CAS 810, Engagements to report on summary financial statements

Q1: What are summary financial statements?

Paragraph 4(c) of CAS 810 defines summary financial statements as: Historical financial information that is derived from financial statements but that contains less detail than the financial statements, while still providing a structured
representation consistent with that provided by the financial statements of the
entitys economic resources or obligations at a point in time or the changes
therein for a period of time. Different jurisdictions may use different terminology to describe such historical financial information.
Paragraph 4(b) of CAS 810 defines audited financial statements as financial
statements audited by the auditor in accordance with CASs, and from which
the summary financial statements are derived. Therefore, when this Guide
refers to audited financial statements, it refers to the complete set of financial statements, as determined by the requirements of the applicable financial reporting framework, from which the summary financial statements are
derived.
Here are some key points to remember about summary financial statements:
They are derived from audited financial statements prepared using a
general purpose or special purpose framework.
They contain less detail than audited financial statements, but are consistent with their presentation.
They are reported on by the same auditors who reported on the audited
financial statements.
They are based on applied criteria that may either be mandated by regulation or legislation or are developed by management.

Q2: Are there generally recognized criteria for preparing

summary financial statements? How does this affect
the audit?
In Canada, there are currently no generally recognized criteria for preparing
summary financial statements. As a result, when summary financial statements
must be prepared, often either:
(a) management has to develop the criteria to apply in preparing the summary
financial statements; or
(b) management has to apply established criteria (for example, those set out
in legislation or regulation) that are not specific enough to determine what
information should be included in the summary financial statements.
In these circumstances, determining the acceptability of the applied criteria will
be more challenging and there may be a greater risk that summary financial
statements may be misleading.

GUIDE FOR AUDITORS|Auditing

Summary Financial Statements

Q3: What conditions must be satisfied and what actions

must be performed before accepting an engagement
to report on summary financial statements?
[CAS 810 paragraphs 57]

The auditor must have been engaged to conduct an audit, in accordance

with CASs, of the financial statements from which the summary financial
statements are derived;
oo
The financial statements may be prepared in accordance with a general-purpose or special-purpose framework.
The auditor shall determine whether the applied criteria are acceptable;
The auditor shall obtain the agreement of management that it acknowledges and understands its responsibility:
oo
for the preparation of the summary financial statements in accordance
with the applied criteria;
oo
to make the audited financial statements available to the intended
users of the summary financial statements without undue difficulty.
If there is a law or regulation that says the audited financial statements
do not need to be made available to the intended users of the summary financial statements and that law establishes the criteria for the
preparation of the summary financial statements, the law or regulations must be described in the summary financial statements; and
oo
to include the auditors report on the summary financial statement
in any document that contains the summary financial statements
and indicates that the auditor has reported on them.
The auditor and management shall agree on the form of opinion to be
expressed on the summary financial statements.

Q4: How does the auditor determine if the applied

criteria are acceptable?
[CAS 810 paragraphs A3A7]

Before accepting an engagement to report on summary financial statements,

the auditor shall determine whether the applied criteria are acceptable. The
following elements may affect the auditors determination.
The nature of the entity.
The purpose of the summary financial statements.
The information needs of the intended users of the summary financial
statements.

CAS 810, Engagements to report on summary financial statements

Whether the applied criteria will result in summary financial statements

that are not misleading in the circumstances.
Whether there are criteria established by an authorized or recognized
standard-setting organization, or by law or regulation, that may be considered acceptable, as in the case of financial statements.
Where there are no established criteria for the preparation of summary
financial statements, whether management can develop the criteria by,
for example, looking at practice in a particular industry.
Whether establishing criteria will result in summary financial statements
that:
oo
adequately disclose their summarized nature and identify the audited
financial statements;
oo
clearly specify (a) from whom or where the audited financial statements are available, or (b) the law or regulation that establishes the
criteria for the preparation of the summary financial statements and
states that the audited financial statements need not be made available to the intended users of the summary financial statements;
oo
adequately disclose the applied criteria;
oo
agree with or can be recalculated from the related information
in the audited financial statements; and
oo
depending on the purpose of the summary financial statements,
contain the information necessary, and at an appropriate level of
aggregation, so as not to be misleading in the circumstances.

Q5: What guidance can the auditor give clients

on developing the applied criteria?
When preparing summary financial statements, management should first look
for criteria established by an authorized or recognized standard-setting organization, or by law or regulation, that may be considered acceptable, as in the
case of financial statements, as discussed in CAS 210, Agreeing the terms of
audit engagements. Where established criteria do not exist, management may
develop the criteria based on, for example, practice in a particular industry.
Management will use professional judgment in developing acceptable criteria.
For example, managements criteria might specify that the summary financial
statements include:
A summary financial statement for each of the financial statements in the
audited financial statements.
oo
Consider if a summarized financial statement for each of the balance
sheet, income statement, cash flow statement or other statements
included in the audited financial statements should be provided. If any
of these are not provided, the basis for not including them should be
described in the criteria.

GUIDE FOR AUDITORS|Auditing

Summary Financial Statements

The major subtotals and totals from the audited financial statements.
Information necessary to achieve a fair summary of the audited financial
statements.
Specification of from whom or where the audited financial statements
are available.
A description of the criteria applied in the preparation of the summary
financial statements.
Information from notes to the audited financial statements dealing with
matters having a pervasive or otherwise significant effect on the summary
financial statements, such as:
oo
going concern
oo
contingencies
oo
subsequent events
oo
significant accounting policies, judgments or estimates
oo
commitments.

Example 1: Note disclosure of applied criteria

Summary financial statements:
The summary financial statements are derived from the audited financial statements, prepared in accordance with Canadian accounting standards for not-forprofit organizations, as at March 31, 2012 and March 31, 2011 and for the years
then ended.
The preparation of these summary financial statements requires management
to determine the information that needs to be reflected in them so that they
are consistent in all material respects with, or represent a fair summary of, the
audited financial statements.
Management prepared these summary financial statements using the following
criteria:
(a) the summary financial statements include a statement for each statement
included in the audited financial statements;
(b) information in the summary financial statements agrees with the related
information in the audited financial statements;
(c) major subtotals, totals and comparative information from the audited financial statements are included; and
(d) the summary financial statements contain the information from the audited
financial statements dealing with matters having a pervasive or otherwise
significant effect on the summarized financial statements.
The audited financial statements of the ABC NFPO are available upon request
by contacting the Organization.

CAS 810, Engagements to report on summary financial statements

Q6: Do summary financial statements need to have

comparative information?
[CAS 810 paragraphs 2122]

If the audited financial statements contain comparative information, there is a

presumption that the summary financial statements will also contain comparative information.
If the audited financial statements contain comparative information, but the
summary financial statements do not, the auditor shall determine whether such
omission is reasonable in the circumstances of the engagement. Circumstances
that may affect this determination include:
the nature and objective of the summary financial statements;
the applied criteria; and
the information needs of the intended users of the summary financial
statements.
If the summary financial statements do contain comparative information, but
they were reported on by another auditor, the auditors report on the summary
financial statements shall also contain the matters that CAS 710, Comparative informationcorresponding figures and comparative financial statements,
requires the auditor to include in the auditors report on the audited financial
statements.

Example 2: Modification to the auditors report for comparative

information
When comparative information is included in the summary financial statements,
but was reported on by another auditor, a modification to the auditors report is
required. An example of this modification is as follows:
Other Matters
Our auditors report dated [date] on the audited financial statements included
an Other Matter paragraph drawing attention to the fact that the financial
statements of ABC Company for the year ended March 31, 20X0 were audited
by other auditors who expressed an unmodified opinion on those statements
on [date]. Such auditors also audited the summary financial statements of ABC
Company for the year ended March 31, 20X0 and expressed an unmodified
opinion on those summary financial statements on [date].

GUIDE FOR AUDITORS|Auditing

Summary Financial Statements

Q7: When the auditor has already reported on the

audited financial statements, what additional
procedures are required to complete
the engagement?
[CAS 810 paragraph 8]

CAS 810 requires that the auditor has already reported on the audited financial
statements when performing an engagement to report on the same entitys
summary financial statements. Paragraph 8 of CAS 810 requires specific
procedures to be performed, and any other procedures that the auditor may
consider necessary, as the basis for the auditors opinion on the summary
financial statements.
The required procedures are described in each bullet point in the table below,
which also provides some examples of disclosures related to the procedures.
Procedures performed should be documented so that, in accordance with
CAS230, Audit Documentation, the documentation is sufficient to enable
an experienced auditor, having no previous connection with the audit,
to understand:
(a) the nature, timing and extent of procedures performed to comply with
the CASs and applicable legal regulatory requirements;
(b) The results of the audit procedures performed, and the audit evidence
obtained; and
(c) Significant matters arising during the audit, the conclusions reached
thereon, and significant professional judgments made in reaching
those conclusions.
Procedures

Example note disclosure (if applicable)

Management prepared these summary financial statements using the following criteria:
(a) the summary financial statements include
a statement for each statement included
in the audited financial statements;
(b) information in the summary financial
statements agrees with the related information in the completed set of audited
financial statements;
(c) major subtotals, totals and comparative
information from the audited financial
statements are included; and
(d) the summary financial statements contain
the information from the audited financial
statements dealing with matters having a
pervasive or otherwise significant effect
on the summary financial statements.

Compare the summary financial statements with the related information in the
audited financial statements to determine
whether the summary financial statements agree with, or can be recalculated
from, the related information in the
audited financial statements.
Evaluate, in view of the purpose of the
summary financial statements, whether
the summary financial statements contain
the information necessary, and are at an
appropriate level of aggregation, so as
not to be misleading in the circumstances.
Evaluate whether the summary financial
statements are prepared in accordance
with the applied criteria.
Evaluate whether the summary financial statements adequately disclose
the applied criteria.

CAS 810, Engagements to report on summary financial statements

Procedures

Example note disclosure (if applicable)

Evaluate whether the summary financial

statements adequately disclose their summarized nature and identify the audited
financial statements

The summary financial statements are

derived from the audited financial statements, prepared in accordance with Canadian
accounting standards for not-for-profit organizations, as at March 31, 2012, and March 31,
2011, and for the years then ended.

When the summary financial statements

are not accompanied by the audited
financial statements, evaluate whether
they describe clearly:
oo
from whom or where the audited
financial statements are available; or
oo
the law or regulation that specifies
that the audited financial statements
need not be made available to the
intended users of the summary
financial statements and establishes
the criteria for the preparation of the
summary financial statements.
Evaluate whether the audited financial
statements are available to the intended
users of the summary financial statements
without undue difficulty, unless law or
regulation provides that they need not
be made available and establishes the
criteria for the preparation of the summary financial statements.

The audited financial statements of the ABC

NFPO are available on request by contacting
the Organization.

Q8: How is an auditors report on summary financial

statements different?
[CAS 810 paragraphs 1419]

Some of the elements peculiar to the auditors report on summary financial

statements have been highlighted below.

Introductory Paragraph

If the date of the auditors report on the summary financial statements is

later than the date of the auditors report on the audited financial statements, a statement should be included indicating that the summary financial statements and the audited financial statements do not reflect the
effects of events subsequent to the date of the auditors report on the
audited financial statements. If the date of the auditors report on the
summary financial statements is the same as the date of the auditors
report on the audited financial statement, no such statement is required.

GUIDE FOR AUDITORS|Auditing

Summary Financial Statements

A statement indicating that the summary financial statements do not

contain all of the disclosures required by the financial reporting framework
applied in the preparation of the audited financial statements and that
reading the summary financial statements is not a substitute for reading
the audited financial statements.

Managements Responsibility

An explanation that management is responsible for the preparation of the

summary financial statements in accordance with the applied criteria; note
that the report would not state that the statements are presented in accordance with a financial reporting framework as in the auditors report on the
audited financial statements.

Auditors Responsibility

An explanation that the auditor is responsible for expressing an opinion

on the summary financial statements based on procedures conducted in
accordance with CAS 810; note that the report would not state that the
work was performed in accordance with Canadian generally accepted
auditing standards as in the auditors report on the audited financial
statements.

Opinion Paragraph

A description of the applied criteria in the opinion paragraph or a reference

to the financial statement note describing the criteria. The criteria should
not be described by reference to one of the financial reporting frameworks in the CPA Canada HandbookAccounting as these frameworks are
designed for complete sets of financial statements.

Example 3: Sample auditors report

REPORT OF THE INDEPENDENT AUDITOR ON THE SUMMARY FINANCIAL
STATEMENTS
[Appropriate Addressee]
The accompanying summary financial statements, which comprise the summary
balance sheet as at December 31, 20X1, the summary income statement, the
summary statement of changes in equity and the summary cash flow statement for the year then ended, and related notes, are derived from the audited
financial statements of ABC Company for the year ended December 31, 20X1.

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CAS 810, Engagements to report on summary financial statements

We expressed an unmodified audit opinion on those financial

statements in our report dated February 15, 20X2. [Those financial statements, and the summary financial statements, do not reflect the effects of events that
occurred subsequent to the date of our report
on those financial statements.]

Extra sentence only

required if date of auditors report on summary
financial statements
differs from the date on
the auditors report on
the financial statements

The summary financial statements do not contain all the disclosures required by
[describe financial reporting framework applied in the preparation of the audited
financial statements of ABC Company]. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements
of ABC Company.
Managements Responsibility for the Summary Financial
Statements
Management is responsible for the preparation of
a summary of the audited financial statements in
accordance with [describe established criteria];
Auditors Responsibility
Our responsibility is to express an opinion on the summary
financial statements based on our procedures, which were conducted in accordance with Canadian Auditing Standard (CAS)
810, Engagements to report on summary financial statements.

Insert applicable reference

to the applied criteria.
Either describe the criteria
here or refer to the financial statement notes (e.g.,
management is responsible for the preparation of
a summary of the audited
financial statements on
the basis described in
Note X).

Opinion
In our opinion, the summary financial statements derived from the audited financial statements of ABC Company for the year ended December
31, 20X1 are a fair summary of those financial statements,
Be sure to reference
in accordance with [describe established criteria
the applied criteria here.
Do NOT state
or refer to Note X].
Canadian GAAP!

[Auditors signature]
[Date of the auditors report]
[Auditors address]

GUIDE FOR AUDITORS|Auditing

Summary Financial Statements

Q9: Are there any differences in the auditors report

when the financial statements are based on a
special purpose framework?
[CAS 800 paragraph 14, CAS 810 paragraph 20]

Yes. Paragraph 14 of CAS 800 requires the auditors report on financial statements prepared in accordance with a special purpose framework to include
an Emphasis of Matter paragraph alerting users of the auditors report that
the financial statements are prepared in accordance with a special purpose
framework and that, as a result, the financial statements may not be suitable
for another purpose.
Paragraph 20 of CAS 810 also indicates that, when distribution or use of the
auditors report on the audited financial statements is restricted, or the auditors report on the audited financial statements alerts readers that the audited
financial statements are prepared in accordance with a special purpose framework, the auditor shall include a similar restriction or alert in the auditors
report on the summary financial statements.

Example 4: Modification to the auditors report when using a

special purpose framework
Emphasis of Matter
Our auditors report dated [date] on the audited financial statements included
an Emphasis of Matter paragraph, drawing attention to the note to the financial
statements that describes the basis of accounting. The audited financial statements are prepared to assist ABC Company to meet the requirements of Regulator DEF. As a result, the audited financial statements may not be suitable for
another purpose. Because the summary financial statements are derived from
the audited financial statements, the summary financial statements also may
not be suitable for another purpose.

11

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CAS 810, Engagements to report on summary financial statements

Other resources

Reporting Implications of New Auditing and Accounting Standards,

Issue No. 11 (January 2014, Q&A 2(h), pp. 5054).
CPA Canada Handbook, Canadian Auditing Standard 810, Engagements
to Report on Summary Financial Statements and Application and Other
Explanatory Material

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