What is Reports on comparative financial statements?
In short
When comparative financial statements are presented, the continuing auditor updates the opinion on the prior period. If the updated opinion differs from the one first issued, an other-matter paragraph explains why.
Key takeaways
- If a predecessor audited the prior period, either the predecessor reissues its report or the current report describes it in an other-matter paragraph.
- Before reissuing, the predecessor reads the current statements and obtains representations from the current auditor and management.
- Restating the prior period affects both reports.
Where it's tested
AUD: Audit Reports — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An auditor is unable to observe the physical inventory count or satisfy themselves through alternative procedures, and inventory represents 60% of total assets. What opinion is appropriate?