The type of the opinion expressed by the predecessor

– 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.