A1

Question 1

Reporting with different opinions:

Answer 1

• auditor can express qualified/adverse/disclaimer
• may include EMP or OMP
• Opinion and Basis for opinion changes
• Indicate reason for change
• p/y unaudited vs c/y audited= scope limit due to beginning balances

Question 2

Updating/changing prior year reports

Answer 2

• auditor becomes aware of evidence that affects prior statements
• EX. A restatement would make p/y report inappropriate
• Format:
  o Date- p/y report
  o Opinion- p/y report
  o Reason for prior opinion
  o Changes that have occurred
  o Statement that opinion is different

Question 3

Prior Period Financial Statements Not Audited

Answer 3

A. P/Y Reviewed or compiled and not reissued:
- Type of service performed in the prior period
- Date of prior period
- Description of any material modifications
- Statement “less in scope than audit”…no basis for opinion
B. P/Y not Audited, reviewed, or compiled
- F/S marked not audited
- OMP
- Auditor assumes no Responsibility (disclaimer)

Question 4

Auditors Responsibility for Subsequent Events:

Answer 4

• CPA is responsible up to date of Auditors report (subsequent period)
• Should issue qualified or adverse if MGT does not make changes for subsequent even
• Perform these procedures PRIME:
  o Post balance sheet txns
  o Rep Letter for MGT
  o Inquiry- Events that call into question
  o Minutes
  o Examine interim F/S and compare with current F/S
• Report Date
   Dual date only for subsequent event
  • Extends responsibility only for that event
   Later date used….extends responsibility for all subsequent evetns

Question 5

OTHER INFO CONTAINING AUDITED FINANCIAL STATEMENTS

Answer 5

Auditor is not responsible for other info
Does not include press releases, analyst briefings, or info contained on website (docs containing the audited F/S)
- Material inconsistency:
o Audited F/S Requires revision: if mgt refuses, then modify audit opinion
o Other info requires revision:
 communicate w/ those charged with governance
 add OMP describing inconsistency
 withhold the use of the report
 or with draw (fraud)

Question 6

Reporting on Supplemtary Info in relation to the F/S as a whole

Answer 6

• Supplementary info is info presented outside the F/S
• Maybe with audited F/S or Separate from F/S
  Reporting on Supplementary Info
• Two objectives
  1. Evaluate presentation
  2. Fairly stated

Conditions for Reporting

1. Info was derived from F/S
2. Info was from the same period
3. F/S were audited and auditors report was issued
4. No adverse or disclaimer on F/S
5. Not restricted
6. Supplementary info presented with F/S

Question 7

Reporting on Supplementary info

Answer 7

Auditor not required to audit
Required procedures:
1. Inquiry of management
2. Determine if the supplementary info is consistent with mgt responses, audited F/S, and other knowledge
3. Obtain rep letter
Reporting on Supplementary info
1. Opinion not required
o No need to audit; just read
o OMP should include disclaimer if MGT refusal for revision
o Include OMP and explain:
 Required supplementary info is included and auditor applied the required procedures
 supplementary info is omitted
 some required supplementary info is missing and some is presented in accordance with guidelines
 identified material departures from guidelines
 auditor not able to complete the required procedures
 There are unresolved doubts about conformance
2. Opinion Permitted
a. Maybe engaged to report on where supplementary info is fairly stated to the F/S

Question 8

Reporting Accountant

Answer 8

Reporting Accountant
- Prepares written report
- Provide oral advice on:
o Requirements of AFRF for a specific txn
o Type of report that may be rendered on a specific entities financial statement
- Cannot report on a hypothetical txn
- Not required to be independent; must disclose it lacks independent
- needs permission to talk to continuing accountant