Reporting on Comparative Financial Statements

Question 1

What type of service is when current period is reviewed and prior period compiled?

Answer 1

Service upgrade

Question 2

What should the continuing accountant do when performing a higher level of service in the current period?

Answer 2

Prior period report should be updated and issued as the last paragraph of the current period’s report

Question 3

What type of service is when current period is compiled and prior period reviewed?

Answer 3

Service downgrade

Question 4

What can an accountant do in the event they have reviewed the prior period statements but compiled the current period statements?

Answer 4

Issue a compilation report and add a paragraph to the report on the current period statements or reissue the prior period review report(combined or presented separately)

Question 5

What procedures should the predecessor accountant perform is the they decide to reissue a compilation or review report?

Answer 5

Read the statements and the report of the current period, compare the prior period statements with those issued previously and currently, and obtain a letter from the successor accountants stating that they are not aware of any relevant information that might have a material effect on the prior period statements.

Question 6

What should the successor accountant perform in the event the predecessor accountant’s report is not reissued?

Answer 6

Make reference to the report of the predecessor accountants in the current report or perform that level of service themselves

Question 7

What should the accountant do when unaudited financial statements are presented in comparative form with audited financial statements?

Answer 7

Reissue the prior period report or include an additional paragraph in the current report describing the responsibility assumed for the prior period’s statements

Question 8

What should an additional paragraph indicate in the event the current period report is unaudited and prior period report is audited?

Answer 8

That no auditing procedures have been performed since the previous report date

Question 9

What should an additional paragraph indicate in the event the current period report is audited and prior period report is unaudited?

Answer 9

A statement that the service was less in scope than an audit and did not provide the basis for an opinion.