Other Information Along with Financial Statements

Question 1

What should auditors do with “other information” that management includes in the F/S report?

Answer 1

• Read it to make sure it is consistent with the audit report
• If it isn’t, you need to address it with management and have them change it

Question 2

If management refuses to make adjustments to the “other information” what steps can the auditors take? (before the release date of the financial statements)

Answer 2

1) Include a other-matter paragraph
2) Withhold the audit report
3) Withdrawal from the engagement

Question 3

If management refuses to make adjustments to the “other information” what steps can the auditors take? (After the report has been released)

Answer 3

1) inform management that the firm will take appropriate action (such as seeking advice from the auditor’s legal counsel)

Question 4

What are some examples of “other information”

Answer 4

• Management reports on operations
• Employment data
• Financial Ratios
• Selected quarterly data
• Names of officers/directors

Question 5

T/F: A cover letter to the F/S, a press release, or website would be included under the definition of “other information”

Answer 5

FALSE