Final answer:
The auditor should read other information included with audited financial statements to ensure consistency, avoiding any inconsistencies that might affect the reliability of the financial statements. The auditor does not perform analytic or substantive procedures on other information unless directly related to the financial statements.
Step-by-step explanation:
When audited financial statements are included in a document containing other information, it is the auditor's responsibility to ensure that this other information is consistent with the financial statements. The correct approach for an auditor in this situation is to read the other information to determine that it is consistent with the audited financial statements.An auditor, when faced with non-financial information accompanying audited financial statements, is expected to employ critical thinking and analysis. The auditor does not perform detailed analytical procedures or substantive testing on this other information, unless it is related to information directly reflected in the financial statements. The aim is to identify any inconsistencies that may be present between the audited financial statements and the other information since such inconsistencies might raise concerns over the reliability of the financial statements. If discrepancies are identified, the auditor should discuss them with management and, if not resolved, this could lead to modifications in the auditor’s report.
A critical aspect in distinguishing fact from opinion is recognizing that an auditor relies on evidence. This means that assertions made in the financial statements can be verified and supported by documentation or other forms of evidence. An analytical report is indeed based on facts, and hence, auditors should distinguish between factual financial information and other narrative descriptions that are opinion-based or forward-looking.