A2 - Reporting on Comparative Financial Statements

Question 1

When comparative financial statements are presented in a document filed with the SEC, how should unaudited financials be treated?

Answer 1

Marked as “unaudited” and NOT referred to in the auditor’s report

Question 2

If there is a downgrade in service, how should this be disclosed if the prior year had a qualified opinion?

Answer 2

There is an additional paragraph which includes an explanation for the prior period opinion