Flashcards in Becker AUD 2.3 - Reporting on Comparative FS Deck (12):
When prior period FS has been audited (expressed an opinion) and the accountant issues a Current period's review or compilation report, any additional paragraph for this issued review or compilation report should indicate what 4 items?
[Past year's FS Audited, Current year's Reviewed or compiled]
1) Mention that Period Period's FS were audited
2) Date of the previous report(s) (usually the last date of the auditor completing all audit work up to that date)
3) What was the opinion expressed on prior period's FS:
a) If Unmodified: no explain reasons for unmodified opinion
b) If qualified adverse or disclaimer mention the reasons
4) Mention that no auditing procedures were done from the previous report to date through the current period's FS date.
If the Predecessor accountant's compilation or review report (on the prior period) is going to be Reissued unchanged,
The predecessor is required to do what?
1) Predecessor required to READ current period's FS and READ current period's successor report.
2) Also required to COMPARE PRIOR year's FS and current year FS before reissue compilation or review report.
3) Required to obtain LETTER from successor accountant that indicates whether the Successor accountant is aware of any matter that might have effect on the FS, including disclosures, reported on by the predecessor accountant.
If predecessor accountants become aware of info that may effect prior year's FS or prior report, they (predecessor accountant) should do what procedures?
1) Perform the same procedures they would have performed during the previous engagement
2) Perform any additional procedures they deem necessary.
Whenever predecessor accountant are asked to reissue their prior report (audit, report, compilation, they should do what two things?
1) Read the new FS and
2) Obtain Rep letter from New accountant.
When the accountant is going to compiled Year 2 FS with all GAAP disclosures in comparative form with year 1 info. However, year 1 FS does not have all GAAP disclosures, the accountant should make a comparative Y1 and Y2 compiled report? or no?
No, accountant may NOT report on Comparative FS (in a compilation) because Y1 FS are not comparable to Y2 FS where Y1 FS lacks GAAP disclosures whereas Y2 FS does.
FYI - even if in the compilation report has an extra paragraph explaining this inconsistency in Y1 FS (no disclosures) and Y2 FS (has disclosures), the accountant cannot create a comparative FS on this.
True or False.
When unaudited FS are presented in comparative form with audited FS in documents filed to SEC, such statements should be marked as "unaudited," but should be referred in the auditor's report. Also, such statements do need to be withheld until audited.
This because such comparative FS need not be referred in auditor's report. Also, it not be withheld until audited.
When audited FS are presented in comparative form with Unaudited FS in prior year and Audited FS in current year, the auditor does either of these two things?
1) Reissue the report on the unaudited FS
2) Include a separate paragraph in current year's report describing the responsibility assumed the unaudited statements.
When reporting on comparative FS, where
Current year FS is reviewed,
past year FS is compiled
then what happens to the report on the prior period?
The report on the period's FS (compiled) should be updated and issued as the last paragraph of the current period's report.
When current period FS is complied and prior period is reviewed,
on reporting on comparative FS: the accountant can what to do one of the two things?
1) Issue a compilation report on current FS and add paragraph to the part on the prior period financial statements.
This paragraph describes the responsibility assumed for the prior period statements, including date of original report and includes a statement that no review procedure were performed after date of the prior period's reviewed FS.
2) Re-issue the prior period review report.
This re-issued prior period's review report COMBINED with current period's compilation with this statement: "No review procedures were performed in connection with the review engagement after the date of review report."
OR, presented separately from the current period's compilation report.
In comparative FS, any FS that has not been audited, reviewed, or complied should not be presented in what from with FS on which an accountant has reported?
True or false
Complied FS that omit substantially all GAAP-required disclousres is still comparable to FS (compiled) that includes such GAAP disclosures.
Complied FS with no GAAP disclosures are NOT comparable to complied FS that do.