Other Reports/Other Engagements, Reports, and Accounting Services

Question 1

When reporting on summary financial statements derived from audited statements, what should the auditor’s report indicate:

Answer 1

1. That the CPA audited and expressed an opinion on the complete financial statements.
2. The date of the auditor’s report on the complete financial statements.
3. The type of opinion expressed.
4. Whether, in the auditor’s opinion, the information set forth in the summary financial statements is consistent, in all material respects, with the audited financial statements from which it was derived.

Question 2

An auditor may report on one basic financial statement and not the others provided that:

Answer 2

The auditor performs procedures on any interrelated items as necessary, such as sales and receivables, inventory and payables, and fixed assets and depreciation.