A1.4 Reports On Comparative Financial Statements

Front 1

Comparative Financial Statements pertain to how many years?

Back 1

2 + years

Front 2

If new evidence affects the prior year's financial statements,______________.

Back 2

-Update the prior opinion in the current year's report

-Disclose the reasons in the emphasis of matter or other matter paragraph.

Front 3

When the current period financial statements are audit and presented in comparative form with prior financial statements that were compiled or reviewed,_____________

Back 3

The auditor should include an other matter paragraph in the current audit report indicating that those prior year(s)' services were less in scope than an audit and they do not provide a basis for expressing on opinion on those financial statements.

Front 4

If the prior period's comparative statements were not audited, reviewed, or compiled, the other matter paragraph should

Back 4

indicate that the auditor assumes no responsibilities for them.

Front 5

If the report of the predecessor auditor is still deemed appropriate,

Back 5

The predecessor auditor may REISSUE their report on the financial statements.

Front 6

If the predecessor auditor deems their report is inappropriate,

Back 6

The predecessor auditor may REVISE their report

Front 7

If the successor auditor does not present the predecessor auditor's report,

Back 7

-The successor auditor should express an opinion on the current period financial statements only. An other matter paragraph should be included indicating that the financial statements from the prior year were audited by a predecessor auditor and the type of opinion expressed by the predecessor auditor as well as the report date.

Front 8

When the prior period's financial statements were not audited, the other matter paragraph should include:

Back 8

1.) The service (review or compilation) performed in the prior period.

2.) The date of the prior period report

3.) A description of any material modifications described in the report

4.) A statement that the service was less in scope than an audit and does not provide the basis for expressing an opinion on the financial statements.

Front 9

If the updated opinion differs from the previous opinion, the auditors should

Back 9

Disclose the reason(s) in an emphasis of matter or other matter paragraph .

Front 10

When the updated opinion differs from the previous opinion, the emphasis of matter or other matter paragraph should disclose:

Back 10

1.) Date of the auditor's previous report

2.) Opinion type previously issued

3.) Reason for the prior opinion

4.) Changes that have occurred

5.) Statement that the "opinion... is different"

Mnemonic=DORCS

Front 11

In deciding whether to reissue their report, the predecessor auditor should:

Back 11

1.) Read the statements for the current period

2.) Compare the statements audited with the current period statements

3.) Obtain a letter of representation form the successor auditor

4.) Inquire of an obtain a letter of representation from management at or near the date of resistance.

5.Date the report as appropriate (Unrevised: use the original report date, Revised:Dual date)

Front 12

When the successor auditor does not present the predecessor auditor's report, the successor auditor should

Back 12

Express an opinion on the current period financials statements only and indicate in an other matter paragraph:

-that the financial statements of the prior period were audited by a predecessor auditor. (should not be named unless the practice of the predecessors was acquired by or merged with that of the successor)

-The type of opinion expressed by the predecessor auditor and, if the opinion was modified, the reasons for the modification

-The nature of any emphasis-of-matter or other-matter paragraph included in the predecessor auditor's report.

-The date of the predecessor auditor's report.

Front 13

If the prior period financial statements are restated and the predecessor agrees to issue a new auditor's report on the restated financial statement of the period, the successor auditor should:

Back 13

Express an opinion only on the current period.