AUD 1.10 - Other Information & Supplementary Information

Question 1

Is the auditor responsible for determining whether other information in documents containing audited financials and the auditors report is properly stated?

Answer 1

No; however, the auditor should read the other information because the credibility of the audited financials may be undermined if there are material inconsistencies between the audited financials and the other information

Question 2

If the other information requires revision for a material inconsistency and management refuses to make the revision, the auditor should:

Answer 2

Communicate this with those charged with governance AND:
1. Include an other-matter (nonissuer) or explanatory (issuer) paragraph describing the inconsistency
2. Withhold the use of the report
OR
3. Withdraw from the engagement and consult with legal counsel

Question 3

If the auditor becomes aware of a material misstatement of fact after reading the other information, and management refuses to take corrective action, the auditor should:

Answer 3

Request that management consult with a legal counsel ad the auditor should consider the advice received from the third party in determining whether the matter is a material misstatement of fact.

Question 4

When reporting on the other information, the auditor of a nonissuer should reference the other information in the audit report by including:

Answer 4

A separate section within the auditors report with the heading “other information” that will contain reference to the information and language clarifying the auditors responsibility regarding this information.

Question 5

When reporting on the other information, the auditor of an issuer should reference the other information in the audit report by including:

Answer 5

An explanatory paragraph within the auditors report disclaiming an opinion on the other information

Question 6

What are the auditors two objectives when engaged to report on supplementary information?

Answer 6

1. Evaluate the presentation of the supplementary information
2. Report on whether the supplementary information is fairly stated

Question 7

In order to issue an opinion on whether the supplementary information is fairly stated, the auditor must determine that the following five conditions are met:

Answer 7

1. Information was derived from or relates directly to the information used to prepare the financials
2. Information relates to the same period as the financials
3. Financials were audited and the auditor issued an auditors report
4. Neither an adverse or disclaimer of opinion was issued on the financials
5. The supplementary information will accompany the audited financials

Question 8

Before reporting on supplementary information, the auditor must obtain an agreement from management that they acknowledge their responsibilities are to:

Answer 8

1. Prepare the information in accordance with applicable criteria
2. Provide the auditor with written representation
3. Include the auditors report on the supplementary information in any document that contains the information
4. Present the information with the audited financials

Question 9

The auditors report on the supplementary information for nonissuers may be presented as:

Answer 9

A “supplementary information” section in the auditors report on the financials or in a separate report

Question 10

If the auditor concludes that the supplementary information is materially misstated for a nonissuer in relation to the financials and management refuses to revise the information, the auditor should:

Answer 10

1. Modify the opinion on the supplementary information to qualified or adverse
2. If a separate report is being issued on the supplementary information, withhold the report

Question 11

When the auditor expresses a qualified opinion on the financials for a nonissuer and the basis for qualification also applies to the supplemental information, the auditor should:

Answer 11

Describe the effects on the supplemental information in the report on supplemental information and express a qualified opinion on the supplemental information

Question 12

If the auditors report on the financials for a nonissuer contains an adverse opinion or a disclaimer of opinion and the auditor has been engaged to report on the supplementary information, the auditor should:

Answer 12

The auditor is PROHIBITED from expressing an opinion on the supplementary information

Question 13

The auditors report on the supplementary information for an issuer may either include:

Answer 13

An explanatory paragraph within the auditors report on the financials OR a separate report on the supplemental information

Question 14

The date of the auditors report on the supplemental information for an issuer should:

Answer 14

Not be earlier than the date of the auditors report on the financials
AND
Not be earlier than the date on which the auditor obtained sufficient appropriate audit evidence

Question 15

If the auditor determines the supplemental information for an issuer is material misstated in relation to the financials, the auditor should:

Answer 15

Describe the natal misstatement in the auditors report on the supplemental information an express a qualified or adverse opinion on the supplemental information

Question 16

If the auditor is unable to obtain sufficient appropriate audit evidence to support an opinion on supplemental information for an issuer, the auditor should:

Answer 16

Disclaim an opinion on the supplemental information

Question 17

When the auditor expresses a qualified opinion on the financials of an issuer and the basis of qualification also applies to the supplemental information, the auditor should:

Answer 17

Describe the effects of the qualification on the supplemental information in the report on supplemental information and express a qualified opinion on the supplemental information

Question 18

When an auditor expresses an adverse opinion or disclaims an opinion on the financials of an issuer, the auditor should do what for the supplemental information?

Answer 18

Also express an adverse or disclaim an opinion on the supplemental information