– The type of the opinion expressed by the predecessor and , if the opinion was modified, the reasons therefore. – The nature of an emphasis-of-matter paragraph or other-matter paragraph included in the predecessor auditor’s report, if any. – The date of that report
E. Audit Reports: Unmodified Opinions with Other-Matter Paragraphs • Other Information in Documents Containing Audited Financial Statements – Check for inconsistency – Inconsistency identified should be communicate with the management for revise. – If the management does not revise • Qualified/Adverse Opinion as to the F/S (departure from GAAP) • Indicate it in the additional paragraph, unmodified opinion with other-matter paragraph, withholding the auditor’s report, withdraw from the engagement • May need to introduce specialists for information that auditors do not have appropriate knowledge. • Required Supplementary Information – Inquire of management about the methods of preparing the information
E. Audit Reports: Unmodified Opinions with Other-Matter Paragraphs – Compare information for consistency with • Management’s responses to the inquiries • The basic financial statements • Other knowledge obtained during the audit – Obtain written representation from management acknowledging its responsibility • The information being measured within guidelines • Consistency of methods followed • Significant assumptions • Supplementary Information in Relation to the Financial Statements as a Whole – Abstract some information from the full version of the financial statement – Auditor usually is engaged to verify if the supplementary information is in line with the F/S and presented fairly.
E. Audit Reports: Unmodified Opinions with Other-Matter Paragraphs – Inquiring of management about the purpose of the information and criteria used to prepare it. – Determining the propriety of the form and content of the information. – Obtaining an understanding of how the information was prepared. – Comparing and reconciling information to underlying accounting and other records. – Inquiring of management concerning significant assumptions. – Evaluating the appropriateness and completeness of the information. – Obtaining written representation. • Alerts as to Report Intended Use (Restricting the Use of an Auditor’s Report)
E. Audit Reports: Unmodified Opinions with Other-Matter Paragraphs • Additional Circumstances Involving Other-Matter Paragraphs • Summary of Placement of Additional Paragraphs
F. Audit Reports: Additional Situations • Audits of Financial Statements Prepared in Accordance with Special Purpose Financial Reporting Frameworks – Cash basis – Tax basis – Regulatory basis – Contractual basis – Justified reason for using a basis other than GAAP – Management should provide with a representation letter – The report should include an emphasis-of-matter paragraph alerting users that the financial statements are prepared in accordance with the special purpose financial reporting framework and refer to the financial statement note that describes the framework.
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- Winter '13
- Auditor's report, audit reports