17. Related Reporting Topics

Question 1

How should the auditor present the supplementary information (SI) when they are presented together with the audited statements?

Answer 1

The auditor reports on the SI in (1) a separate report or (2) a separate section subsequent to the opinion section.

Question 2

What does supplementary information include?

Answer 2

(1) additional details or explanations of items in or related to the statements, (2) consolidating information, (3) statistical data, and (4) historical summaries

Question 3

The auditor should not express an opinion on the supplementary information if

Answer 3

(s)he expressed an adverse opinion or disclaimed an opinion on the audited financial statements.

Question 4

According to auditing standard AU-C 915, Reports on Application of Requirements of an Applicable Financial Reporting Framework, when planning and performing the engagement, the reporting accountant should

Answer 4

1. Obtain an understanding of the form and substance of the transaction(s) or the conditions relevant to the type of report that might be issued
2. Review the relevant requirements of the framework (e.g., U.S. GAAP)
3. Consult with other professionals or experts, if appropriate
4. Consider creditable precedents or analogies
5. Consult with the continuing accountant of the entity to determine the available relevant facts, including disputes with management

Question 5

What should the report state about the financial statement’s responsibility?

Answer 5

That they are the responsibility of the management.

Question 6

The objective of a review of interim financial information (IFI) of a nonissuer is to provide the auditor with a basis for

Answer 6

Reporting whether material modifications should be made for such information to conform with the applicable financial reporting framework.

Question 7

What does AU-C 800 identifiy as special purpose frameworks for financial statements other than GAAP?

Answer 7

They are (1) the cash basis, (2) the tax basis, (3) a regulatory basis, (4) a contractual basis, and (5) a definite set of logical and reasonable criteria applied to all items in the statements. Compiled statements are not audited, and appraised value is not a special purpose framework.

Question 8

When management chooses to include supplementary information (SI) with the financial statements, the auditor should

Answer 8

Report on SI if (s)he is specifically engaged to do so.

Question 9

The objective of a review of interim financial information of an issuer is to provide an auditor with a basis for reporting whether

Answer 9

Material modifications should be made to conform with generally accepted accounting principles.